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A Simple Dynamic Model of Uneven Development and Overtaking

  • Klaus Desmet

    (Universidad Carlos III de Madrid)

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

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Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 112 (2002)
Issue (Month): 482 (October)
Pages: 894-918

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Handle: RePEc:ecj:econjl:v:112:y:2002:i:482:p:894-918
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