Fingleton, B. (2001) Equilibrium and economic growth: spatial econometric models and simulations. Journal of Regional Science, 41 (1). pp. 117-148. ISSN 0022-4146Full text not available in this repository. (Request a copy from the Strathclyde author)
Neoclassical theory assumes diminishing returns to capital and spatially constant exogenously-determined technological progress, although it is questionable whether these are realistic assumptions for modeling manufacturing productivity growth variations across European Union (E.U.) regions. In contrast, the model developed in this paper assumes increasing returns and spatially varying technical progress, and is linked to endogenous growth theory and particularly to 'new economic geography' theory. Simulations, involving 178 E.U.regions, show that productivity levels and growth rates are higher in all E.U. regions when the financially assisted (Objective 1) regions have faster output growth. This also reduces inequalities in levels of technology. Allowing the core regions to grow faster has a similar effect of raising productivity growth rates across the E.U., although inequality increases. Thus, the simulations are seen as an attempt to develop a type of 'computable geographical equilibrium' model which, as suggested by Fujita, Krugman, and Venables (1999), is the way theoretical economic geography needs to evolve in order to become a predictive discipline.
|Keywords:||econometrics, spatial econometric models, simulation, productivity, Commerce, Development, Environmental Science (miscellaneous)|
|Subjects:||Social Sciences > Commerce|
|Department:||Strathclyde Business School > Economics|
|Depositing user:||Strathprints Administrator|
|Date Deposited:||23 Dec 2008 14:36|
|Last modified:||14 Apr 2017 02:48|