Christophe Feder, Vinko Muštra (p)

One of the most intriguing questions in economics science is why some regional economies manage to renew themselves, whereas others remain locked in decline (Martin and Sunley, 2006; Gong and Hassink, 2017). When it has received huge interest of the scientists this question has been analysed under several academic fields, especially recently under the regional resilience framework (Christopherson et al., 2010; Simmie and Martin, 2010; Bristow and Healy 2014; Martin and Sunley, 2015; Modica and Reggiani, 2015).
Although regional resilience concept has been applied in a broader set of fields related to regional resilience, it still represents a fuzzy concept (Gong and Hassink, 2017). One of the most important shortcomings of the exiting concepts is neglecting the state and policy on different spatial levels, especially not taking into consideration the decentralization framework (Swanstrom, 2008; Bristow, 2010; Pike et al., 2010). This issues have been especially raised due to concerns about the long-term (un)sustainability of public finances that has supported the implementation of budgetary consolidation measures, affecting governments on different institutional level in many countries.
Therefore, this paper represents the first attempt of investigating the role of institutional design of fiscal consolidation on regional economic resilience. More precisely, the paper tries to identify both the possible channels of influence of fiscal consolidations on regional economic resilience and the effects of these channels in the different institutional designs.
In the empirical part of the paper we explore the impact of fiscal consolidation on regional economic resilience under different institutional designs among EU member countries for period 1995-2009. Two groups of variables are particularly important for this study: the fiscal consolidation and the regional economic resilience. Due to fact that recent literature recognizes problems with using cyclically-adjusted primary budget balance (CAPB) as a measure for fiscal consolidation, we use a new database of fiscal consolidation introduced by Devries et al. (2011) that successfully tackles all this issues. Considering that the regional economic resilience is a phenomenon whose the measurement is difficult, we have decided to use different measures described in literature (e.g. Martin, 2012; Fingleton et al., 2012; Cowell, 2013; Sensier et al., 2016).
The results of the research should provide the evidence of different effects of fiscal consolidation on regional economic resilience, emphasizing the institutional design. Finally, the paper highlights that fiscal consolidation is not only the matter of the public debt levels or economic growth, but also an important regional issue.

Lise Bourdeau-lepage, Didier Soto (p)

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Maximilian Göthner (p), Moritz Zöllner (p)

Over the past few decades, inequality has increased in various countries (OECD, 2015). Recent estimations suggest that the average income of the richest 10 percent is about nine times as high as that of the poorest 10 percent (World Economic Forum, 2015). This ratio is most likely to increase up to a level at which the richest 1 percent will own more than the remaining 99 percent of the population if the issue of inequality is not tackled by policy makers (Hardoon, 2015).

Many theories have been proposed to explain the rise in income inequality. The traditional approach usually focusses on variables such as the Gross Domestic Product (e.g. Kuznets, 1955), city size (e.g. Korpi, 2008), unemployment rate (e.g. Ukpere & Slabbert, 2009), population density (e.g. Wheeler, 2004) and education level (e.g. Rodríguez-Pose & Tselios, 2009), whilst a new field of research concentrates on the impact of technological novelties, i.e. innovations (e.g. Lee, 2011; Lee & Rodríguez-Pose, 2013; Breau, Kogler & Bolton, 2014). The peculiarity of this new research direction is the focus on distributional effects of innovative activities. Rather than being evenly distributed across space, they tend to be clustered. Studies show that especially cities and regions are a hotbed for innovation (Jaffe, Trajtenberg & Henderson, 1993). Though there is no doubt that cities and regions provide an excellent environment for innovative activities to take place, questions arise for what concerns the effect on the income distribution (Scott, 2006).

We investigate the relationship between innovation activity and income inequality across space by using a unique dataset for 86 German planning regions. The dataset combines information on individual income levels from the German Socio-Economic Panel (GSOEP), patent data provided by the European Patent Office (EPO) and the Patent Cooperation Treaty (PCT), and regional data obtained by the Federal Statistical Office for the years 2001-2011.

Using different specifications of the Gini coefficient to measure income inequality and standardized patent application counts as a proxy for the regional level of innovation activity, our results strongly support the hypothesized positive relationship. Fixed-effects regressions show that regions with a higher patenting activity are also more likely to be characterized by higher levels of wage dispersion, even when we control for further factors. Additionally, vector-autoregressive models provide preliminary evidence for a reversed causality of the innovation-inequality link suggesting that the level of wage dispersion can be predictive of innovation activity in a region.