National Growth and Regional Income Inequality: A Consistent Model

In a Recent Volume of this Review, Fukuchi and Nobukuni have developed an interesting discussion on the trade-off relation between national growth and regional income equality for the Japanese economy [2]. Unfortunately, however, their theoretical framework contains some conceptual difficulties which may be itemized as follows: (I)Question on the admissiblity of the approximation procedure adopted for the deduction of stability condition, which has deprived their stability proof of the global character,(II)Question on the use of absolute variance of the per capita output as the index of regional income inequality,(III)Inconsistency between the sum of regional increments of labor or capital and the national increment of them in the model,2(IV)Question on the exogenous treatment of the overall growth rate of capital which should be an endogenous variable of the system.3