DP12803 | Power to the Periphery? The failure of Regional Convergence in Canada, 1890-2006

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Economic historians have long signalled the importance of location-specific resource booms in the Canadian development experience, but a full analysis of the dynamics of Canada’s internal income dynamics is conspicuously absent. This article presents comprehensive estimates of regional inequality in Canada from 1890 to 2006 and assesses the sources of convergence and divergence across Canadian provinces. Our convergence decompositions support the central role of resource booms in accounting for regional income dynamics, and show that structural change contributing relatively little to the development process. Our findings are in sharp contrast to the historical experience of other countries, including the United States.