Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/261027 
Year of Publication: 
2022
Series/Report no.: 
Working Paper No. 2022-01
Publisher: 
The University of Utah, Department of Economics, Salt Lake City, UT
Abstract: 
We document two novel stylized facts on European integration and cohesion. First, we show that the interregional income distribution, measured as GDP per capita at the NUTS-3 level, is bimodal for all considered years. Second, we demonstrate that this mixture of two log-normal distributions provides an excellent fit for this interregional distribution in all considered years. We put forward two meso-level interpretations of these stylized facts, based on heterodox growth theory: The log-normality of the individual clusters hints at a stochastically multiplicative process, where growth is strongly path-dependent. This can be derived from maximum entropy considerations. However, the bimodality in the income distributions also implies two separate growth mechanisms. We show that the high-variance log-normal distribution governs the dy- namics at both tails of the income distribution, which might be interpreted as the core and periphery and the low-variance variant the bulk of the distribution, thus inter- pretable as a semi-periphery.
Subjects: 
Inequality
Europe
Maximum Entropy
Geometric Brownian Motion
Core
Periphery
Resilience
JEL: 
C46
D63
F15
F43
C14
C63
Document Type: 
Working Paper

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