Economy Regional GDP in Europe versus regional income inequality

[Angela]

See:
https://***********/thomasforth/status/1212898648067125249

According to this analyst, regional GDP differs in all European countries. The difference lies in how much the central government redistributes it to equalize income within the country.

The French seem to be kings at it, if the researcher is correct, Spain doesn't redistribute anything, Eastern Europe is pretty bad, and England is pretty good. Italy is pretty bad. So much for the Lega Nord complaints that all the wealth created by the north is sent to the south.

So what does that look like? Well Spain and Germany have quite similar regional inequality in GDP, but regional fiscal transfers in Germany mean it has much lower regional inequality in income. You can see that on a scatter plot.

















We see the same thing with the UK vs. Italy. In Italy you keep what you produce, but in the UK, high productivity in London, Oxford, Aberdeen, is taxed and sent to Essex, Southern Scotland, and Lincolnshire. So we are a much more regionally equal country in income than in GDP.

In many places, especially East Europe, regional inequality has increased massively. This is typically a "big/capital city establishes itself as a top-tier European trading city and booms while the rest of the country remains domestic-orientated". Biggest example is Bulgaria.

Last but not least, the Presidents of regional fiscal transfer, the French. Regional GDP inequality is high, barely less than the UK, but they love to redistribute. Huge production in Paris, but incomes aren't much higher after high taxes are sent to France's struggling regions.

 

[pxxlsisk]

This is not surprising, if Eastern Europe had not been swallowed up by the Soviet Union, their level of economy would have been the same as that of England or Germany. Although it is debatable about Germany, at the expense of its eastern territory, which is also less developed than the western part.