Regional convergence in the UK, 1970-1995

Abstract

This paper tests for the existence of long run inter-regional equilibrium relationships in income per capita within the UK over the period 1971–95. We examine both the cross-sectional and time-series evidence of inter-regional convergence. The time series approach allows us to investigate whether there are long-run regional equilibrium trends, whereas the cross-sectional analysis allows us to investigate whether the dispersion in per capita incomes between regions has narrowed. While it was found that some of the regions converged over time, there were no obvious explanations for why these regions converged and others did not. Moreover, with the exception of Northern Ireland and Scotland, regional policy appears to have had little impact on the relative positions of assisted regions in terms of their share of UK GDP.