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A Non-linear Dynamic Model of Spatial Economic Development and R&D Policy

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  • Nijkamp, P
  • Poot, H J
  • Rouwendal, J

Abstract

This paper addresses the issue of economic development from the perspective of productivity increases generated by technological progress emerging from R&D expenditures. The long-run evolutionary path of spatial systems (countries, regions, cities etc.) is analyzed by means of a multi-regional dynamic (discrete-time) model incorporating the spatial transfer of technological change. While a positive feedback exists between R&D and economic growth, the production of new technology itself exhibits decreasing returns. Moreover, capacity constraints also limit growth. The stability conditions associated with R&D and innovation diffusion are extensively studied. It will be demonstrated that the system concerned can generate a wide range of dynamic behavior, including chaotic evolutions of the May-type. Simulations illustrate this. For example, economic fluctuations can be amplified through innovation diffusion.

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Bibliographic Info

Article provided by Springer in its journal Annals of Regional Science.

Volume (Year): 25 (1991)
Issue (Month): 4 ()
Pages: 287-302

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Handle: RePEc:spr:anresc:v:25:y:1991:i:4:p:287-302

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Cited by:
  1. Nijkamp, P. & Reggiani, A., 1992. "Non linear evolution of dynamic spatial systems : lessons from chaos and niche theory," Serie Research Memoranda 0066, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  2. Luís A. Aguirre & Antônio Aguirre, 1995. "A tutorial introduction to nonlinear dynamics in economics," Textos para Discussão Cedeplar-UFMG td088, Cedeplar, Universidade Federal de Minas Gerais.
  3. Nijkamp, P. & Poot, J., 1991. "Lessons from non-linear dynamic economics," Serie Research Memoranda 0105, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  4. Nijkamp, P. & Reggiani, A., 1990. "Spatio-temporal processes in dynamic logit models," Serie Research Memoranda 0063, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.

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