مهدی یداللهی

The real interest rate is a key and important economic variable in policymaking, economic stability, and economic growth. Current advanced economies are heavily influenced by interest rates and react quickly to changes in them. In fact, interest rates act as a powerful control tool in managing and directing the market. In this regard, the main goal of this study is to investigate the convergence of the economic performance of the provinces and to investigate the effect of the real interest rate on the convergence speed of the economic performance of Iran's provinces.The results obtained from estimating models using spatial econometrics in the period of 2011 – 2022 showed that the real interest rate has a significant negative impact on economic performance convergence among provinces. Annually, 3.86% of the economic gap between provinces is reduced in the case of absolute convergence, and 4.55% and 4.175% in the case of conditional convergence, moving toward a stable state. Other results revealed that the individuals using the internet in provinces as an indicator of information and Communication Technology (ICT), and the real capital stock in provinces have a positive and significant effect on economic performance convergence. However, the number of university graduates per capita in provinces, as a measure of human capital, does not have a significant impact on the convergence of economic performance across provinces. This contrasts with the expectation that human capital would have a significant effect on the convergence of economic performance across provinces.