Replication package for "The Diagnostic Wage: Cheap Credit, Single-Rate Regimes, and Peripheral Non-Convergence"

Abstract

Replication package for the working paper "The Diagnostic Wage: Cheap Credit, Single-Rate Regimes, and Peripheral Non-Convergence — A Theory with Descriptive Evidence" (Luis Palma Batista, Independent Researcher; companion working paper MPRA Paper 131057). This package contains the Python scripts and data-construction instructions that reproduce the paper's descriptive results. All input data are public, drawn from Eurostat regional national accounts and employment (NUTS-3 level) for the four southern euro-area members — Greece, Italy, Spain and Portugal, 2000–2023. Contents: code/01_placebo_tests.py — placebo tests: the effect appears only at the COVID shock and only in the windfall channel, and is null in normal years and in agriculture. code/02_lowtier_quartile_gap.py — the central descriptive result: the boom-bust quartile gap in low-VAB, tourism-exposed regions (about -7.8 percentage points). code/03_robustness_cutoffs_interaction.py — robustness across sample cutoffs and the tourism-by-low-tier interaction. code/04_wild_cluster_bootstrap.py — inference with four country clusters (wild cluster bootstrap and randomization inference). code/05_welfare_illustrative.py — the illustrative welfare bound (Appendix D), a calibrated order-of-magnitude, not a central estimate. README.md and data/README.txt — how to obtain the public Eurostat inputs and reproduce each table and figure. Requirements: Python 3.10+ with numpy. No proprietary software or restricted data are used. Note on inference: with only four country clusters, conventional cluster-robust standard errors are not valid inference; results are reported as stable descriptive magnitudes and patterns, not significance tests. Firm-level identification is the paper's declared frontier. License: CC BY 4.0.