Working Paper: CEPR ID: DP2767
Authors: Diego Puga
Abstract: Despite large regional policy expenditures, regional inequalities in Europe have not narrowed substantially over the last two decades, and by some measures have even widened. Income differences across states have fallen, but inequalities between regions within each state have risen. European states have developed increasingly different production structures and European regions have also become increasingly polarised in terms of their unemployment rates. This Paper describes these trends, and discusses how recent location theories can help us to explain them and reconsider the role of regional policies, and especially of transport infrastructure improvements, in such an environment.
Keywords: inequalities; location; regional policy; transport infrastructure; europe
JEL Codes: H54; R40; R58
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| regional policies (R50) | regional inequalities (R11) |
| transport infrastructure (R42) | regional development (R58) |
| reductions in trade or transport costs (F12) | spatial location of economic activities (R32) |
| agglomeration (R11) | regional disparities (R11) |
| lack of interregional mobility and wage rigidities (J69) | income inequalities between regions (R11) |
| market access and competition (L11) | regional economic dynamics (R11) |