E3S Web Conf.
Volume 301, 2021VI International Scientific Conference “Territorial Inequality: a Problem or Development Driver” (REC-2021)
|Number of page(s)||8|
|Section||Regional Convergence and Divergence|
|Published online||06 August 2021|
Analysis of hysteresis in convergence after global financial crisis of 2007
1 University of the West of England, Bristol Business School, Bristol, BS16 1QY, UK
2 Institute of Economics of the Ural Branch of the Russian Academy of Sciences, Ekaterinburg, 620014, Russian Federation
3 Ural State University of Economics, Ekaterinburg, 620144, Russian Federation
* Corresponding author: Archana.Kumari@uwe.ac.uk
Researchers of hysteresis outline the long-term change in growth paths of economies. It entails the post-crisis change in growth paths of economies through the change of macroeconomic indicators, such as employment and output. Recessionary shocks might have positive or negative impacts on economies’ growth paths which in turn affects convergence and divergence in economies. In this research, hysteresis is explored in convergence across 110 countries induced by the global financial recession of 2007. Findings suggest that as a post-crisis change, hysteresis in convergence is in place. The difference arises in adaptability of economies to changes. The reason for convergence of poor and rich countries might be more intensive foreign investments in developing nations. These investments have a positive influence on economic performance in developing countries by increasing employment rates.
Key words: convergence / divergence / hysteresis / regional differences
© The Authors, published by EDP Sciences, 2021
This is an Open Access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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