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By studying the interaction between social capital and decentralization, we show that political decentralization can be a source of divergence across heterogeneous regions. In particular, we claim that since the local endowments of social capital display their effect on the economy mainly...
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levels. The so-called absolute convergence hypothesis focuses on initial income levels to account for the variability in … income growth among regions. Empirical data seem to support the absolute convergence hypothesis for U.S. states, but the data …
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