Economic Growth and Regional Income Disparities in Canada and the Northern United States

Abstract

This paper compares the evolution of regional disparaties in per capita incomes in Canada and the 12 American states along Canada's southern border. The phenomenon of capital accumulation as described by the neoclassical growth model can explain much of the observed decline in regional dispersion in Canada relative to the northern states. However, it appears that Canadians are more likely than residents of the northern states to remain in regions where they do not have jobs, a factor which contributes to the persistently higher level of regional dispersion of output per capita in Canada.