Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/19233
Authors: 
Lauridsen, Jørgen
Kosfeld, Reinhold
Year of Publication: 
2004
Series/Report no.: 
HWWA Discussion Paper 261
Abstract: 
Econometric analysis of convergence processes across countries or regions usually refers to a transition period between an arbitrary chosen starting year and a fictitious steady state. Panel unit root tests and panel cointegration techniques have proved to belong to powerful econometric tools if the conditions are met. When referring to economically defined regions, though, it is rather an exception than the rule that coherent time series are available. For this case we introduce a dynamic spatial modelling approach which is suitable to trace regional adjustment processes in space instead of time. It is shown how the spatial error-correction mechanism (SEC model) can be estimated depending on the spatial stationarity properties of the variables under investigation. The dynamic spatial modelling approach presented in this paper is applied to the issue of conditional income and productivity convergence across labour market regions in unified Germany.
Subjects: 
Regional convergence
dynamic spatial models
spatial unit roots
spatial error-correction
JEL: 
R15
R11
C21
Document Type: 
Working Paper

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