Benedict Guttman-Kenney, 03 March 2021

The UK's recovery is heavily weighted towards the “home counties” around outer London and the South. Utilising Fable Data: a real-time source of consumption data that is a highly correlated, leading indicator of Bank of England and Office for National Statistics data, Ben Guttman-Kenney and colleagues observe a stark contrast between strong online spending growth while offline spending contracts with patterns of regional difference in spending matching lockdown tier levels. To prevent such COVID-19-driven regional inequalities from becoming persistent they propose governments introduce temporary, regionally-targeted interventions in 2021.

You can read the full paper behind this research here: A Levelling Down and the COVID-19 Lockdowns: Uneven Regional Recovery in UK Consumer Spending John Gathergood, Fabian Gunzinger, Benedict Guttman-Kenney, Edika Quispe-Torreblanca, and Neil Stewart

Gunes Aşik, Ulaş Karakoç, Sevket Pamuk, 17 October 2020

Unlike for developed countries, only a limited number of studies exist on the long-term evolution of regional inequalities in today’s developing countries. With the help of a novel dataset, this column examines the evolution of regional income inequality within present-day borders of Turkey. It finds an inverse U-shaped pattern for regional disparities since 1880, with a peak at around 1950 (although the East lagged further behind until the end of the 20th century). A combination of causes led by geography, including proximity to Europe, structural change, industrialisation and agglomeration economies, as well as ethnic conflict and demographic movements, appear to be behind this pattern.

Donald R. Davis, Eric Mengus, Tomasz K. Michalski, 23 April 2020

In recent decades, labour market polarisation led to a decline in middle-paid jobs partially offset by an increase in both high and low-paid jobs. At the same time, a great divergence of cities occurred, with initially skilled and typically larger cities becoming even more skilled relative to initially less skilled and typically smaller cities. This column prevents evidence on a tight link between these two phenomena in France. The heterogeneity of responses to labour market polarisation shocks across cities of different sizes is found to account for their consequently diverging trajectories.

Sebastian Hauptmeier, Fédéric Holm-Hadulla, Katerina Nikalexi, 22 April 2020

In many parts of the world, the economic fortunes of poorer and richer regions have drifted apart over recent years, triggering debate on how to explain and address this trend. This column adds a further angle to this debate: the link between monetary policy and regional inequality. Using data on economic activity at the city and county level in Europe, it documents pronounced heterogeneity in the regional patterns of monetary policy transmission. As a consequence of this heterogeneity, monetary policy tightening aggravates regional inequality and policy easing mitigates it. The COVID-19 crisis may temporarily reinforce regional inequality.

Sascha O. Becker, Lukas Mergele, Ludger Woessmann, 05 April 2020

The year 2020 marks the 30th anniversary of the reunification of West and East Germany. German separation in 1949 into the Federal Republic of Germany and the German Democratic Republic and its reunification in 1990 offer a unique setting of a rather unexpected introduction and termination of a communist regime in one part of a previously and afterwards unified country. However, this column argues that this period of German history is not a completely straightforward ‘experiment’ from which to learn about the effects of communism.

Sebastian Heise, Tommaso Porzio, 29 February 2020

Thirty years after reunification, a stark and persistent wage gap between East Germany and West Germany remains. This column studies why East Germans do not migrate to the West to take advantage of the higher real wages there. Analysing data from more than 1 million establishments and almost 2 million individuals over 25 years, it suggests that moving people across space is difficult and costly. Reallocating workers to better jobs at their current location could be a more cost-effective avenue to increase aggregate wages, and even accelerate regional convergence.

Andrew Haldane, 07 February 2020

Is regional inequality a problem that central banks should worry about? Andy Haldane of the Bank of England tells Tim Phillips why he thanks the answer is yes: but why we also need to think about what, and how, we measure.

Charles Goodhart, Anthony Venables, 17 January 2020

When the industries that have sustained our cities decline, how can we regenerate urban areas? At the SUERF conference in Amsterdam, Tony Venables and Charles Goodhart tell Tim Phillips that redevelopment policies may have made regional inequality and social conflict worse.

, 13 December 2018

David Arnold, Riccardo Crescenzi and Sergio Petralia of LSE's GILD team summarise cutting-edge research that examines the growing disparity between the places plugged into 21st century flows of investment, talent and knowledge and those that aren’t.

, 12 November 2018

Major cities are thriving as the world becomes increasingly interconnected, but many places are also missing out. In this video, David Arnold and Riccardo Crescenzi of LSE and Mara Giua of Roma Tre University give an overview of the LSE's Global Investment – Local Development project, which examines the mistakes that many regions are making and offers solutions on how to move forward.

Gregory Clark, Neil Cummins, 30 July 2018

Northern England is now less educated and less productive than the south. This north-south divide is often characterised by policymakers as evidence of market failure. This column uses surname distributions to show that the northern decline can instead be explained by persistent outmigration of talent from the north. People of northern origin perform as well on average as those of southern origin. Talented northerners, however, are now mainly located in the south, where they are an economic elite.

Simona Iammarino, Andrés Rodríguez-Pose, Michael Storper, 13 July 2018

Regional economic divergence has become a threat to economic progress, social cohesion, and political stability in Europe. Market processes and policies that are supposed to spread prosperity and opportunity are no longer sufficiently effective. This column argues that a different approach to economic development is required – one that would strengthen Europe’s strongest regions, but with new methods and instruments to unleash the economic potential of weaker cities and regions. The approach should be adaptable to the specific characteristics, structures, and challenges faced by different groups of cities and regions. 

Joan R. Rosés, Nikolaus Wolf, 20 July 2018

Inequality between Europe's regions has risen in the last few decades. Joan Rosés and Nikolaus Wolf discuss their research on inequality at both the personal and regional levels across Europe in the last century. Rising regional inequality is one factor behind the growing populism in Europe.

Joan R. Rosés, Nikolaus Wolf, 14 March 2018

A recent literature has explored growing personal wealth inequality in countries around the world. This column explores the widening wealth gap between regions and across states in Europe. Using data going back to 1900, it shows that regional convergence ended around 1980 and the gap has been growing since then, with capital regions and declining industrial regions at the two extremes. This rise in regional inequality, combined with rising personal inequality, has played a significant role in the recent populist backlash.

Andrés Rodríguez-Pose, Yannis Psycharis, Vassilis Tselios, 03 March 2015

Electoral results and the geographical allocation of public investment in Greece have been intimately related. This column describes how incumbent Greek governments between 1975 and 2009 tended to reward those constituencies returning them to office. Increases in both the absolute and relative electoral returns for the party in government in a given Greek region were traditionally repaid with a greater level of per capita investment in that region. Single-member constituencies were the greatest beneficiaries of this type of pork-barrel politics.


CEPR Policy Research