1 The authors would like to thank Magnus Andersson, Jacopo Cimadomo, Fédéric Holm-Hadulla, Philipp Rother, Ad van Riet, Jürgen von Hagen and participants of an ECB seminar for helpful comments on previous versions of the paper. We are very grateful to Alex Isar for excellent research assistance and inputs. Abstract 4 Non-technical summary 5

This paper tests the hypothesis of "conditional &bgr;-convergence" in per capita income across the United States by extending the neoclassical growth model to incorporate public capital, government taxation, and human capital, and controlling empirically for technology growth. We expand the period of analysis from the late 1980s when studies using public capital stock have stopped, investigate spatial variation across the United States under various cross-sectional and panel spatial models, and tackle the issue of nonlinearities. All model "variations" provide evidence of economic convergence across the United States over the period 1960-2005. Copyright (c) 2008 the author(s). Journal compilation (c) 2008 RSAI.

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