Cleomar Gomes da Silva (p), Sinara do Valle

Anna Davidsson

This paper investigates the dynamics of regional prices in Brazil, focusing on inflation persistence and convergence, for the period January 2003 - November 2024. Time-Varying Parameter models and Club Convergence estimations are applied to analyze the regional inflation rates of the following cities: Belem, Belo Horizonte, Brasilia, Curitiba, Fortaleza, Goiania, Recife, Salvador, Rio de Janeiro, Sao Paulo, and Porto Alegre. Regional inflation is also disaggregated into nine components: food and beverage, housing, household items, clothing, transportation, health and personal care, personal expenses, education, communication. The “food and beverage” component is also broken into “food at home” and “food away from home”. The results reveal significant heterogeneity in price dynamics among Brazilian cities, with low inflation persistence in Sao Paulo, Salvador, Belem, and Brasilia, and high persistence in Curitiba. The Covid-19 pandemic increased inflation inertia in Recife, Belo Horizonte, Rio de Janeiro, and Curitiba, but not in Fortaleza. Overall convergence is not observed in the regional headline CPI-IPCA inflation rates, but only clubs characterized by the transitional divergence and turn-around phase. However, when the regional sectoral disaggregated inflation rates are analyzed, global convergence is found in the household items and transportation components, whereas the transitional divergence and turn-around phase is detected in the behavior of the communication, food and beverages, and food at home components. This transitional divergence and turn-around phase, which can be seen as a type of weaker convergence, is also the pattern observed in the convergence clubs formed by the other regional sectoral inflation rates, except in one case. It means that, even though Brazil is a country of continental dimensions, its inflation rate components have some idiosyncrasies that eventually make them converge in some way.

Anna Davidsson (p), Tomas Gustavsson (p), Mattias Bengtsson

Charalampos Arachovas

To meet Swedish and European climate goals, the automotive cluster in Western Sweden is currently undergoing a rapid transition towards electrification. This entails significant challenges for the labor market as well as for the municipalities in the region.

Drawing upon qualitative interviews, this study investigates how municipal and regional actors manage the transformation processes and the challenges it involves. More specifically, we explore the potential goal conflicts associated with green transition and the importance of political governance and collaboration at different levels. Theoretically, we draw on different conceptualizations of green transition combined with a framework on regional and green growth regimes.

The analysis stresses several challenges to manage on a municipal and regional level. These involve, for instance, goal conflicts raised by investments in the welfare sector or the industrial sector and issues of permits and financing of infrastructure for energy supply, transports and public transportation. According to the interviewees, these challenges raise the need for changed perspectives and routines for local government; for a broad coalition of actors working together toward a green transition; and of a non-ambiguous, national politics that paves way for legitimacy and acceptance for change.

The analysis further illustrates that a broad coalition exists in Western Sweden, constituting a ‘social block’ involving company representatives, politicians and public officials, working for a regional green growth regime. However, actors associated with the state level are relatively absent, and municipalities and regions must increasingly shoulder responsibilities that have previously belonged to the state. This is stressed as a main challenge for the transition to move forward. Not least because the municipalities generally lack the necessary funds for the required, large-scale investments, and because their income is more volatile compared to state finances. Also, local variations of needs, resources and the institutional setting that the municipalities operate within constitute challenges for regional collaboration.

In conclusion, the regional actors act jointly in the interests of regional and green growth. With the state being relatively absent in this quest, the financial and organizational burden is high on the municipalities, also expected to bear the risks associated with the transition. This could potentially increase local inequalities within the region, with municipalities that can, or cannot, afford the changes required to accomplish a green growth. It also enforces the danger of social aspects of the transition being neglected, pushing primarily toward green growth without consideration of it also being just and socially sustainable.

Charalampos Arachovas (p), Dimitrios Christopoulos, Antonios Rovolis(p)

Leo Van Wissen

This paper comprises two main sections. The first section examines the evolution of public expenditure and capital investment across Greek regions. Utilizing various spatial statistical measures, we compare the regional distribution of public consumption against public infrastructure investment. Our analysis indicates that, amid recent economic austerity in Greece, public investment has experienced a significant decline, whereas public consumption expenditure has remained relatively inelastic. The second section focuses on estimating fiscal multipliers for both public spending and public infrastructure investment. Literature suggests that public infrastructure investments often yield a lower short-term economic impact compared to public consumption. Moreover, fiscal multipliers are believed to fluctuate throughout the business cycle. By employing regional data, we isolate regional business cycles while controlling for national and international factors. Fiscal multipliers are estimated using Local Projections methods , and our results are benchmarked against similar studies within other European Union countries. Understanding the distinct effects of public consumption and capital investment shocks can guide regional and national policymakers in formulating effective fiscal strategies.

Leo Van Wissen (p), Becky Arnold (p)

Cleomar Gomes da Silva

In different stages of life, people are attracted to different types of regions. At younger ages, urban regions are preferred, later in life regions with other characteristics are preferred. We postulate that the attractiveness of regions is composed of economic, social and environmental dimensions. Using European regional data at the NUTS 3 level on net migration and machine-learning techniques we estimate country-specific models of regional attractiveness which are age-specific. Results show that in many countries the young ages are attracted to regional with a strong economic dimension, whereas regions with a strong social and environmental dimension are more favored by migrants later in life.