How regional policies can affect growth: a macroeconometric model for the Southern Italian Regions, co-authors

Can regional policies accelerate the convergence path of dualistic economic growth in a single country, offsetting market failures and making growth transmission channels more efficient? A structural dynamic econometric model has been set up in order to account for these changes. Three are the main sources of growth playing a role in this context: the 'neigh­ bourhood' effect, the interaction between the economic environment and the agents' expectations, and the policy impact on economic take-off. The evidence shows that policies strongly boost economic growth of a local area and narrow the gap between the regions of a dual economy.