THE IMPACT OF THE ECONOMIC CRISIS IN THE PROCESS OF CONVERGENCE OF THE GREEK REGIONS

Panagiotis KOUDOUMAKIS

Dr. Civil Engineer, Democritus University of Thrace (DUTh), Department of Civil Engineering, Greece

pkoudoum@civil.duth.gr

George BOTZORIS

Assistant Professor, Democritus University of Thrace (DUTh), Department of Civil Engineering, Greece

gbotzori@civil.duth.gr

Angelos PROTOPAPAS

Professor, Democritus University of Thrace (DUTh), Department of Civil Engineering, Greece

aproto@civil.duth.gr

Vassilios PROFILLIDIS

Professor, Democritus University of Thrace (DUTh), Department of Civil Engineering, Greece

vprofill@civil.duth.gr

Abstract

In this paper, the impact of the economic crisis on the convergence of the Greek region’s economy to the European average is examined. In particular, it is being considered the condition of absolute β-convergence using the econometric model of Barro and Sala-i-Martin. The dependent variable was represented by the average value of Gross Domestic Product (GDP) per capita in Purchasing Power Standards (PPS). Additionally the hypothesis of the σ-convergence of the regions of the EU and Greece is being considered, based on the coefficient of variation weighted by population. The results of both absolute β-convergence and σ-convergence suggest a declining trend of convergence and persistence of inequalities for the regions of the EU, following the outbreak of 2008 economic crisis. Regarding the regions of Greece, the results indicate, on the one hand, their deviation from the average income of the regions of the EU and, on the other, a significant increase in the regional disparities in the period 2000-2016.

Keywords: Convergence, Disparities, Economic Crisis, Regions

JEL classification: O41, R11, R12
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REGIONAL UNEMPLOYMENT DYNAMICS IN TURKEY

Hasan ENGIN DURAN

Izmir Institute of Technology, City and Regional Planning Department, Associate Professor of Economics, Gülbahce Kampüsü, Izmir Yüksek Teknoloji Ensitüsü, Mimarlık Fakültesi, Şehir ve bölge Planlama Bölümü, Urla-Izmir,  Tel: +90 232 750 70 66

enginduran@iyte.edu.tr

Abstract

Aim of the study is to investigate region specific causes of unemployment for Turkish 26 Nuts-2 regions between 2004-2017. We aim at contributing to the literature by analyzing (i) whether regional unemployment and sub-groups (with respect to gender, age, education) is driven by excessive labor supply or shortage of labor demand, (ii) which sub-groups have higher unemployment in regions. In terms of methodology, we employ descriptive and exploratory analyses, spatial tests and panel regressions. Our findings indicate three main results: First, there is a sizable difference in unemployment rates across regions and the dispersion is getting stronger over time. Second, there are extremely low and high unemployment rates in various sub-groups and regions. Third, changes in unemployment is mostly driven by changes in labor supply rather than demand. Among the 208 cases (26 regions x 8 sub-groups), in 154 cases, the major driver of unemployment is the excessive labor supply.

Keywords: Regional Unemployment, Labor Supply, Panel Data Regression

JEL classification: R11, R23, R12
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THE MACROECONOMIC IMPACT OF REGIONAL MINIMUM WAGEs: A CROSS-PROVINCE DATA EVIDENCE FROM INDONESIA

Khairul AMRI

Ph.D Student in Economic Science, Faculty of Economic and Business Syiah Kuala University Banda Aceh, Indonesia, Lecture in Faculty of Islamic Economics and Business, State Islamic University Ar-Raniry, Banda Aceh Indonesia

khairul.amri@ar-raniry.ac.id

Abstract

The main purpose of our study is to determine the causality relationship between economic growth, regional minimum wages (RMWs), unemployment rate and labor force participation rate (LFP). Using cross-section data set of 27 provinces from Indonesia for the period of 2003-2015, data analyzed using panel co-integration test, panel vector error correction model, and Granger causality test. Panel co-integration test indicates that there is a long-run relationship between the variables. In the long-run, LFP positively related to the economic growth, and negatively related to RMWs. The unemployment is positively related to both the economic growth and RMWs. In the short-run, RMWS has a significant and positive effect on economic growth. The unemployment and LFP have a negative and significant effect on RMWs. LFP has a negative and significant effect on unemployment and RMWs has a positive and significant effect on LFP. Furthermore, economic growth has a negative and significant effect on LFP. The result of Granger causality test points out that there is a bidirectional causality relationship between economic growth and RMWs and between RMWs and LFP. In addition, unemployment rate causes RMWs, and LFP causes unemployment.

Keywords: Economic growth, regional minimum wages, labor force participation, unemployment and panel vector error correction model

JEL classification: J31, O4, R23
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