Measurement – Regional Science Inquiry

Tigran MNATSAKANYAN

Ph.D. in Economics, Armenian State University of Economics

tigran.mnatsakanyan.am@gmail.com

Ruben HAYRAPETYAN

Doctor of Sciences in Economics, Professor, Armenian State University of Economics, City Councilor at Yerevan City Council

ruben_hayrapetyan@yahoo.com

Dejan MOLNAR

Ph.D. in Economics, Associate Professor, University of Belgrade – Faculty of Economics

dejan.molnar@ekof.bg.ac.rs

Abstract

There are manifestations of regional development disparities in almost every country, but this phenomenon is especially dangerous in those countries that have only one “center of gravity”. Significantly more developed capital can transform itself from “center of gravity” to a “black hole” by emptying the potential of the regions. To prevent such a destructive scenario, it is firstly necessary to disclose the roots of regional development disparity, and the reasons for its subjective perception. Without these steps, any intervention, policy, or measure taken or implemented by the state can aggravate further disproportion or at least be ineffective. Only after discovering the above-mentioned roots, it will become possible to develop a comprehensive strategy for overcoming regional disproportionate development and derive from it a complex of effective measures. All these goals are intended to be achieved within the framework of the research funded by the Science Committee of the Ministry of Education, Science, Culture and Sports of the Republic of Armenia within the support program for young researchers (project code: 19YR-5B038). This paper focuses mainly on discussion of regional disparity measurement tools and development of a tool appropriate not only for accurate measurements, but also for serving as a motivational tool for authorities. Calculations have been made for Armenia and Serbia, taking into consideration several key similarities of economic, social, and cultural nature, which have significantly influenced the perception of local governance and role of communities, as well as the mindset toward socioeconomic processes in general.

Keywords: regional development, regional disparity, measurement, development indicator, governance

JEL classification: H700, H770, H830, R500, R580

pp. 327-348

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Amitrajeet A. BATABYAL

Department of Economics, Rochester Institute of Technology, 92 Lomb Memorial Drive, Rochester, NY 14623-5604, USA.

aabgsh@rit.edu

Abstract

We study some measurement issues that arise when analyzing the long run behavior of the j_th creative region’s time t log output per creative class member (y_j(t)) when this region is part of an aggregate economy of j=1,…N creative regions. We focus first (second) on absolute (relative) convergence. In the absolute (relative) convergence case, the N creative regions are similar (dissimilar) in that they all have the same (different) balanced growth path (BGP) level of log output per creative class member denoted by y^BGP(y_j^BGP) In the absolute convergence case, we analyze how to estimate the speed of convergence parameter (σ) and then discuss the relationship between the variance of y_j(t) and that of y_j(0) In the relative convergence case, we study the error associated with estimating σ using the methodology of the absolute convergence case. Finally, suppose y_j^BGP= a + bX_j where Xj is an explanatory variable such as creative capital and a and b are positive constants. Here, we study how to estimate b from our knowledge of the coefficients of a related cross-region growth regression.

Keywords: Convergence, Creative Capital, Economic Growth, Measurement, Output

JEL classification: R11, C18