National and Regional Patterns of Convergence and Divergence
Edited by John Adams and Francesco Pigliaru
Chapter 16: Economic growth and regional convergence in a sustainable space-economy
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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