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A Simple Dynamic Model of Uneven Development and Overtaking

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  • Klaus Desmet

    (Universidad Carlos III de Madrid)

Abstract

This paper extends the Brezis et al. (1993) Ricardian leapfrogging model by introducing geographically mobile capital and allowing for a wider variety of development patterns. In a two--region economy, localised learning--by--doing causes specialisation and uneven development. Technological change reverses the existing development pattern if the new technology locates in the low--wage region. However, the development pattern may also be reinforced if spillovers between the old and the new technology make the leading region a more attractive location. Capital flows are explicitly analysed and it is furthermore shown that inter--regional transfers may reduce the chance of take--off. Copyright Royal Economic Society 2002

Suggested Citation

  • Klaus Desmet, 2002. "A Simple Dynamic Model of Uneven Development and Overtaking," Economic Journal, Royal Economic Society, vol. 112(482), pages 894-918, October.
    • Handle: RePEc:ecj:econjl:v:112:y:2002:i:482:p:894-918
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    References listed on IDEAS

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    1. Audretsch, David B & Feldman, Maryann P, 1996. "R&D Spillovers and the Geography of Innovation and Production," American Economic Review, American Economic Association, vol. 86(3), pages 630-640, June.
    2. Costas Azariadis & Allan Drazen, 1990. "Threshold Externalities in Economic Development," The Quarterly Journal of Economics, Oxford University Press, vol. 105(2), pages 501-526.
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    Cited by:

    1. Arslan Razmi, 2021. "Capital inflows, sustained investment surges and the role of external economies of scale in a developing economy," Metroeconomica, Wiley Blackwell, vol. 72(2), pages 365-387, May.
    2. Lionel Artige & Carmen Camacho & David De La Croix, 2004. "Wealth Breeds Decline: Reversals of Leadership and Consumption Habits," Journal of Economic Growth, Springer, vol. 9(4), pages 423-449, December.
    3. Marcus Gumpert, 2020. "Underdevelopment through Productivity Improvement Measures in an Advanced Region," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 865-872.
    4. Diodato, Dario & Malerba, Franco & Morrison, Andrea, 2018. "The made-in effect and leapfrogging: A model of leadership change for products with country-of-origin bias," European Economic Review, Elsevier, vol. 101(C), pages 297-329.
    5. Lommerud, Kjell Erik & Meland, Frode & Rune Straume, Odd, 2006. "Globalisation and union opposition to technological change," Journal of International Economics, Elsevier, vol. 68(1), pages 1-23, January.
    6. Klaus Desmet & Ignacio Ortuño Ortín, 2007. "Rational Underdevelopment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 109(1), pages 1-24, March.
    7. Furukawa, Yuichi & Takarada, Yasuhiro, 2013. "Technological change and international interaction in environmental policies," MPRA Paper 44047, University Library of Munich, Germany.
    8. Gallo Fredrik, 2006. "Increasing Returns, Input-Output Linkages, and Technological Leapfrogging," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 6(1), pages 1-29, August.
    9. Yuichi Furukawa, 2015. "Leapfrogging cycles in international competition," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 59(2), pages 401-433, June.
    10. Furukawa, Yuichi, 2012. "Perpetual leapfrogging in international competition," MPRA Paper 40126, University Library of Munich, Germany, revised Jul 2012.
    11. Rota, Mauro, 2009. "Long Run Loans and Industrial Policy in Italy in the 1960s," MPRA Paper 17189, University Library of Munich, Germany.
    12. Marcus Gumpert, 2020. "Regional Inequality: An Analysis under an Extended Core-Peripheral Model," Journal of Industry, Competition and Trade, Springer, vol. 20(1), pages 157-186, March.
    13. Souleymane COULIBALY, 2006. "Persistent Uneven Spread of Economic Activities within Developing RIAs," Cahiers de Recherches Economiques du Département d'économie 06.01, Université de Lausanne, Faculté des HEC, Département d’économie.
    14. Kessler, Anke & Lessmann, Christian, 2010. "Interregional Redistribution and Regional Disparities: How Equalization Does (Not) Work," CEPR Discussion Papers 8133, C.E.P.R. Discussion Papers.
    15. Meunier, Olivier & Mignolet , Michel & Mulquin, Marie-Eve, 2007. "Interpersonal transfers: Do they impact the growth of poor and rich European regions?," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 10, pages 155-170.
    16. Rutzer, Christian, 2014. "From the Loser to the Winner - How Trade Liberalization can lead to Leapfrogging between Countries," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100313, Verein für Socialpolitik / German Economic Association.

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