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Economic Growth and Change

Economic Growth and Change

National and Regional Patterns of Convergence and Divergence

Edited by John Adams and Francesco Pigliaru

The pursuit of economic growth is at the top of every nation’s policy agenda at the end of the 20th century. This authoritative and comprehensive book goes beyond the narrowly-based convergence model of economic growth by considering global, national and regional patterns of growth from a comparative perspective.

Chapter 16: Economic growth and regional convergence in a sustainable space-economy

Jeroen C.J. M. van den Bergh and Peter Nijkamp

Subjects: development studies, development economics, economics and finance, development economics, regional economics


Page 448  16. Economic growth and regional convergence in a sustainable space­economy  Jeroen C.J.M. van den Bergh and  Peter Nijkamp  16.1 ENDOGENOUS SPATIAL GROWTH: PROLOGUE  The analysis of spatial growth disparities has a long history in regional economics. The theoretical and empirical research on this issue offers different viewpoints,  sometimes based on a neoclassical paradigm with a clear emphasis on labour supply, capital and technological progress, sometimes based on a post­Keynesian  approach with particular emphasis on base activities as the generator of export (and hence output) growth in a region. Nevertheless, the neoclassical growth model,  based on a standard production function with flexible factor prices and exogenous technical change, has become rather popular in the past decades (see Armstrong and  Taylor, 1994). Assuming free factor mobility, with capital more mobile than labour, it is likely that low­wage regions will experience the fastest output growth, since  capital will move into these areas faster than labour will move out.  However, the assumption of a fixed technology in spatial­economic dynamics is rather restrictive, and has been severely criticized in both the technological innovation  literature and the economic growth literature. In recent years, in particular the ‘endogenous growth’ school starting with Romer (1986) and Lucas (1988) has made  path­breaking attempts to include technical progress as part of an economic system’s behaviour. In this context, Romer (1994) states: ‘The phrase ‘‘endogenous  growth” embraces a diverse body of theoretical and empirical work that emerged in the 1980s. This work distinguishes itself...

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