Problems in Measuring Economic Progress

In regional income comparisons, relative and absolute measures sometimes produce apparently contradictory results. These can be reconciled if a proper time perspective is utilized. An income gap between regions, relative or absolute, indicates the situation at a particular time, while growth rates and changes in proportions point to long-run implications. As long as a regional growth rate exceeds the national rate, the absolute regional income gap may increase or decrease in the short run, but in the long run the ratio of per capita incomes must approach unity and the income gap must approach zero.