Convergence of regional inequalities: What lies behind it

The thesis is an analysis of phenomenon of 'convergence' which implies the tendency of the poorer economies to grow faster than the richer economies so that over a period of time the former catch-up with the latter.;Convergence is analyzed in 3 different contexts: convergence across (a) the geographically contiguous states of the USA, (b) the counties in the state of Indiana, and (c) a cross-section of 59 developing countries from the Sub-Saharan Africa, Latin America and Asia.;Chapters 1 and 2 contain the literature review and background material. Chapter 3 contains a detailed analysis of the growth experience of the 48 geographically contiguous states of the USA. Using cross-section analysis, it is shown that when we consider an aggregate production function of the economy, e.g., per capita income, a strong evidence for convergence exists. But when we disaggregate the economic activity into a few broad sectors, the evidence for convergence is thin. An attempt is made to explain convergence at aggregate level in terms of a move from the farm to the non-farm sector of the economy. Time series tests overwhelmingly reject convergence both at an aggregate and at the disaggregated levels.;Chapter 4 extends the analysis of Chapter 3 to analyze convergence across the counties of the state of Indiana. The results in Chapter 4 essentially parallel the conclusions of Chapter 3, i.e., strong evidence for convergence at an aggregate level and a (possible) lack of it when the economy is disaggregated into the farm and the non-farm sectors.;Chapter 5 relates to a cross section of 59 developing countries. The role of various factors such as physical and human capital, population growth, size of the government, openness of the economy, socio-political climate and structural transformation of the economy in explaining cross country variations in growth rates is examined. It is shown that the speed of structural transformation of the economies is the most important contributory factor to the rate of economic growth. It is also shown that after holding constant a number of variables, the poorer developing countries grow faster than the richer developing countries a la the conditional convergence hypothesis.