Recent Regional Growth Patterns: More Inequality

The "convergence thesis"states that when a national economy attains a certain but unspecified level of development, regional income differences will disappear due to market forces. Historically, income data in the United States have generally supported the convergence thesis; however, data for the first half of the current decade are inconsistent with the thesis and invite reconsideration of the issue. In recent years, dynamic or exogenous factors leading to divergence have overwhelmed passive market forces. The long-run convergence thesis may be irrelevant for open regional economies operating in a dynamic world economy. This has implications for regional analysts and policymakers who will need to identify and understand the dynamic factors that are critical in the regional economic development process.