Regional economic growth and inequality in Greece

Abstract

AbstractOver recent years, the context of regional inequality has been dramatically reshaped and become significantly more challenging, especially for the European Union and its Member States; this is primarily as a result of the processes of globalization and economic integration, the recent economic crisis of 2008, as well as the surge of populism and anti‐establishment extremism. It is in this setting that this paper investigates, in a consistent way, regional inequality in Greece in the post‐1981 era, paying special attention to two distinct but related issues; that is: (i) regional inequality and economic development (the inverted‐U hypothesis); and (ii) regional inequality and business cycles. The study presents empirical evidence, using sound and rigorous spatial methods, such as exploratory spatial data analysis, spatial econometrics and (spatial) decomposition techniques. Greece is studied not only as a country that has been at the epicentre of such seismic changes, but also as a country of the European Union that presents high regional disparities and undergoes severe economic cycles. From a policy perspective, the findings of this study hold the potential for advancing measures that will improve the effectiveness of regional economic policy.