Trends and cycles in regional economic growth: How spatial differences shaped the Swedish growth experience from 1860-2009

Using a novel dataset of regional GDP per worker from 1860 to 2009, this paper analyzes communalities in regional long-term growth trajectories for 24 Swedish regions. Wavelet Analysis and Principal Component Analysis are used to decompose regional growth trajectories and assess the extent that regional growth patterns share common trends and cyclical properties. The study found that regional growth trends show strong common features among groups of regions in Sweden. Natural-resource-rich regions benefited from the First Industrial Revolution. Contrary to regional development in many other European economies, a growth surge in Sweden later benefited virtually the whole country during the Second Industrial Revolution. The countrywide trend of growth slowed in the 1970s when the metropolitan regions became the main growth engines. In mid- and short-term cyclical movements, regions display more heterogeneous growth patterns, and we find evidence of mid-term, sequential lead-lag patterns in regional growth, especially between urban cores and the periphery.

► This paper analyzes communalities in regional long-term growth trajectories for 24 Swedish regions 1860-2009. ► Wavelet Analysis and Principal Component Analysis are used to decompose regional growth trajectories. ► It is assessed to what extent growth in regions share common trend and cyclical properties. ► It is found that regional trend growth shows strong common features among groups of regions during specific time periods. ► Evidence of mid-term sequential lead-lag patterns in regional growth is also found.