A Simple Dynamic Model of Uneven Development and Overtaking
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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Volume (Year): 112 (2002)
Issue (Month): 482 (October)
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- Audretsch, David B & Feldman, Maryann P, 1996. "R&D Spillovers and the Geography of Innovation and Production," American Economic Review, American Economic Association, vol. 86(3), pages 630-640, June.
- Costas Azariadis & Allan Drazen, 1990. "Threshold Externalities in Economic Development," The Quarterly Journal of Economics, Oxford University Press, vol. 105(2), pages 501-526.