Trends and cycles in regional economic growth : how spatial differences formed the Swedish growth experience 1860-2009

Abstract

Using a novel dataset on regional GDP per worker 1860-2009, this paper analyzes communalities in regional long-term growth trajectories for 24 Swedish provinces. Wavelet Analysis and Principal Component Analysis are used to decompose regional growth trajectories, and to assess to what extent growth in regions share common trend and cyclical properties. It is found that regional trend growth shows strong common features among groups of regions. Primarily natural resource rich regions benefited from the First Industrial Revolution. Contrary to regional development in many other European economies, a strong growth surge in Sweden later benefited virtually the whole country during the Second Industrial Revolution. Growth in this countrywide trend slowed down in the 1970s, when the metropolitan regions became main growth engines. In mid- and short-term cyclical movements regions display more heterogeneous growth patterns, and evidence of mid-term sequential lead-lag patterns in regional growth is found, especially between core and periphery.