Abstract

This paper presents new evidence on long-run patterns of interregional inequality in the United States. The evidence points to a fundamental shift from convergence to divergence, prompting a reconsideration of theory. The paper augments existing demand-side theories, linking them to historical perspectives on disruptive innovation and industrial revolutions. It offers an integrated account of convergence and divergence that matches the facts. The resulting perspective directs attention to workers that are complementary to the current revolution; as well as to the contingency of policy effects on whether or not the regions are in a mode of convergence or divergence. Keywords: regional development, inequality, technological change.This paper presents new evidence on long-run patterns of interregional inequality in the United States. The evidence points to a fundamental shift from convergence to divergence, prompting a reconsideration of theory. The paper augments existing demand-side theories, linking them to historical perspectives on disruptive innovation and industrial revolutions. It offers an integrated account of convergence and divergence that matches the facts. The resulting perspective directs attention to workers that are complementary to the current revolution; as well as to the contingency of policy effects on whether or not the regions are in a mode of convergence or divergence.