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The export base model with a supply-side stimulus to the export sector

Swales, John and Ha, Soo Jung (2011) The export base model with a supply-side stimulus to the export sector. Annals of Regional Science. pp. 1-31. ISSN 0570-1864

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Abstract

In the export-base model, the level of a region’s economic activity is underpinned by the performance of its export sector (Daly, 1940; Dixon and Thirlwall, 1975; Kaldor, 1970; North, 1955). This theory is now almost universally represented as a primitive version of the familiar Input-Output (IO) or Keynesian demand-driven approach, where regional output is linked to regional exports through a rather mechanistic multiplier process (Romanoff, 1974). Further, in a standard IO inter-regional framework, the expansion of output in one region always generates positive impacts on other regions. That is to say, there is always a positive spread, and no negative backwash, effect.