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Kaldor's Laws and Spatial Dependence: Evidence for the European Regions

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Jordi Pons-Novell, Elisabet Viladecans-Marsal

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Abstract

PONS-NOVELL J. and VILADECANS-MARSAL E. (1999) Kaldor's laws and spatial dependence: evidence for the European regions, Reg. Studies 33, 443-451. In this paper we provide an outline of Kaldor's growth model and test its relevance to the economic experience of European regions during the period 1984-92. Kaldor's first law asserts that manufacturing is the engine of economic growth. His second proposition, also known as Verdoorn's law, states that there is a strong positive relation between manufacturing productivity growth and manufacturing output growth. Kaldor's third law holds that overall productivity growth is positively related to manufacturing output growth, and negatively related to employment in non-manufacturing sectors. The empirical results, corrected for the presence of spatial autocorrelation, indicate that Kaldor's second and third laws are compatible with the economic growth of European regions during the period 1984-92. PONS-NOVELL J. et VILADECANS-MARSAL E. (1999) Les lois de Kaldor et la dépendance géographique: des preuves provenant des régions européennes, Reg. Studies 33, 443-451. Cet article fournit une esquisse du modèle de croissance de Kaldor et évalue sa pertinence pour l'expérience économique des régions européennes de 1984 à 1992. La premie ¤ re loi de Kaldor affirme que l'industrie est le moteur de la croissance économique. La deuxième loi, connue aussi sous le nom de la loi de Verdoorn, affirme que la croissance de la productivité industrielle est en corrélation positive avec la croissance de la production industrielle. La troisième loi de Kaldor affirme que la croissance globale de la productivité est en corrélation positive avec la croissance de la production industrielle et en corrélation négative avec l'emploi dans les secteurs hors de l'industrie. Les résultats empiriques, corrigés pour autocorrélation spatiale, montrent que les deuxième et troisième lois de Kaldor sont compatibles avec la croissance économique des régions européennes de 1984 à 1992. PONS-NOVELL J. und VILADECANS-MARSAL E. (1999) Kaldors Gesetze und räumliche Abha ¨ngigkeit: Beweise für die europäischen Regionen, Reg. Studies 33, 443–451. Mit dem vorliegenden Aufsatz stellen die Autoren eine Übersicht über Kaldors Wachstumsmodell vor, und prüfen seine Relevanz für die Wirtschaftserfahrungen der europäischen Regionen im Zeitraum 1984–1992. Kaldors erstes Gesetz behauptet, Herstellung sei das Zugpferd wirtschaftlichen Wachstums. Seine zweite Aussage, die auch unter der Bezeichnung Verdoorns Gesetz bekannt ist, stellt fest, daß zwischen der Zunahme der Herstellerproduktivität und dem Anstieg der Ertragsleistung eine durchaus positive Beziehung bestehe. Kaldors drittes Gesetz ist der Ansicht, daß die Gesamtzunahme der Produktivität sich positiv zum Anstieg der Ertragsleistung verhält, doch negativ zur Beschäftigung in nicht-herstellenden Sektoren. Die auf das Vorhandensein räumlicher Autokorrelation hin korrigierten, empirischen Ergebnisse deuten darauf hin, daß Kaldors zweites und drittes Gesetz mit dem wirtschaftlichen Wachstum europäischer Regionen im Zeitraum 1984–1992 vereinbar ist.

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Article provided by Taylor and Francis Journals in its journal Regional Studies.

Volume (Year): 33 (1999)
Issue (Month): 5 (July)
Pages: 443-451
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Handle: RePEc:taf:regstd:v:33:y:1999:i:5:p:443-451

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Related research
Keywords: Kaldor'S Laws Growth Productivity Regional Economics Spatial Autocorrelation;

References listed on IDEAS
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  1. Drakopoulos, S A & Theodossiou, I, 1991. "Kaldorian Approach to Greek Economic Growth," Applied Economics, Taylor and Francis Journals, vol. 23(10), pages 1683-89, October.
  2. Nancy J. Wulwick, 1991. "Did the Verdoorn Law Hang on Japan," Eastern Economic Journal, Eastern Economic Association, vol. 17(1), pages 15-20, Jan-Mar. [Downloadable!]
  3. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October. [Downloadable!] (restricted)
    Other versions:
  4. Atesoglu, H Sonmez, 1993. "Manufacturing and Economic Growth in the United States," Applied Economics, Taylor and Francis Journals, vol. 25(1), pages 67-69, January.
  5. Parikh, A, 1978. "Differences in Growth Rates and Kaldor's Laws," Economica, London School of Economics and Political Science, vol. 45(177), pages 83-91, February. [Downloadable!] (restricted)
  6. Young, Allyn A., 1928. "Increasing Returns and Economic Progress," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 38, pages 527-542. [Downloadable!]
  7. P Burridge, 1981. "Testing for a common factor in a spatial autoregression model," Environment and Planning A, Pion Ltd, London, vol. 13(7), pages 795-800, July. [Downloadable!] (restricted)
  8. Romer, Paul M, 1994. "The Origins of Endogenous Growth," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 3-22, Winter. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. d’Artis Kancs, 2001. "Predicting European Enlargement Impacts: A Framework of Inter-regional General Equilibrium," EERI Research Paper Series EERI_RP_2001_01, Economics and Econometrics Research Institute (EERI). [Downloadable!]
    Other versions:
  2. Tregenna, F., 2009. "Contracting Out of Service Activities and the Effects on Sectoral Employment Patterns in South Africa," Cambridge Working Papers in Economics 0906, Faculty of Economics, University of Cambridge. [Downloadable!]
  3. Artis Kancs, 2001. "Regional development policies modelling: a framework of general equilibrium," ERSA conference papers ersa01p189, European Regional Science Association. [Downloadable!]
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