A perfect foresight model of regional development and skill specialization
AbstractThis paper proposes a perfect foresight model of a two-region two-sector economy, where localized externalities in the acquisition of skills cause specialization and uneven regional development. The introduction of a new technology either reinforces or reverses this development pattern. Wealth differences are reinforced if, in spite of higher wages, the new technology locates in the advanced region, attracted by skills similar to the needs of the new industry. Otherwise the new technology locates where wages are lower, in which case the lagging region overtakes the leading one. In spite of perfect foresight, history alone determines the outcome in this economy.
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Bibliographic InfoPaper provided by Universidad Carlos III de Madrid in its series Open Access publications from Universidad Carlos III de Madrid with number info:hdl:10016/4793.
Length: 244 p.
Date of creation: Mar 2000
Date of revision:
Publication status: Published in Regional Science and Urban Economics (2000-03) v.v. 30, p.221-242
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Web page: http://www.uc3m.es
Regional development; Localized externalities; Uneven development;
Other versions of this item:
- Desmet, Klaus, 2000. "A perfect foresight model of regional development and skill specialization," Regional Science and Urban Economics, Elsevier, vol. 30(2), pages 221-242, March.
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
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