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Long-run effects of regional policy in an economic union

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Author Info

  • Uwe Walz

    (Department of Economics, University of Mannheim, Seminargebaeude A5, D-68131 Mannheim, Germany)

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    Abstract

    Regional policy in economic unions (e.g. in the European Union) is usually conducted with the objective of overcoming regional disparities. By developing a two-regional growth model with endogenous technological change, we address the long-term implications of regional policy measures. We show that regional policies aiming to support the less-developed region do not only change the location of production between the regions but also affect the overall growth performance of the union. By altering the incentive to accumulate knowledge capital, regional policies influence the steady-state growth rate. Our analysis shows that a potential trade-off between regional equity and dynamic efficiency exists.

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    Bibliographic Info

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

    Volume (Year): 30 (1996)
    Issue (Month): 2 ()
    Pages: 165-183

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    Handle: RePEc:spr:anresc:v:30:y:1996:i:2:p:165-183

    Note: Received: September 1994 / Accepted: February 1996
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    Web page: http://link.springer.de/link/service/journals/00168/index.htm
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    Cited by:
    1. Kilkenny, Maureen, 2003. "Transport Costs and Rural Development," Staff General Research Papers 10309, Iowa State University, Department of Economics.

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