THE RELATIONSHIPS BETWEEN THE DEVELOPMENT OF REGIONAL DISPARITIES AND NATIONAL BUSINESS CYCLE: A THEORETICAL DISCUSSION AND EMPIRICAL EVIDENCE (CASE OF SELECTED EU COUNTRIES)
This paper is focused on the issue of changes in the tendencies of regional economic development during the phases of business cycle. Firstly we discuss the various theoretical approaches to this issue predicting either pro-cyclical or anti-cyclical development of the regional disparities. Then is performed a basic empirical analysis for five selected EU countries on NUTS II level. We use the coefficient of variation of per capita GVA and the Hodric-Prescott time-series filter. In most cases, the regional disparities tend to increase mainly in the onset of economic expansion. Observed divergence became slow during the running expansion as the result of spatial diffusion of economic growth. On the other hand there is no clear pattern during the recession. Nevertheless, we find rather stabilization or decline of the disparities. Therefore our findings support rather pro-cyclical development of the regional disparities but with non-linear and irregular pattern affected by the strong industry-specific shocks.
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