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Long-run effects of regional policy in an economic union

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  • Uwe Walz

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

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.

Suggested Citation

  • Uwe Walz, 1996. "Long-run effects of regional policy in an economic union," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 30(2), pages 165-183.
  • Handle: RePEc:spr:anresc:v:30:y:1996:i:2:p:165-183
    Note: Received: September 1994 / Accepted: February 1996
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    Cited by:

    1. Maureen Kilkenny, 1999. "Explicitly Spatial Rural-Urban Computable General Equilibrium," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(3), pages 647-652.
    2. repec:kap:iecepo:v:14:y:2017:i:2:d:10.1007_s10368-016-0371-1 is not listed on IDEAS
    3. Maureen Kilkenny, 1995. "Transport Costs and Rural Development," Food and Agricultural Policy Research Institute (FAPRI) Publications 95-wp133, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
    4. Bretschger Lucas, 2002. "Wachstumstheoretische Perspektiven der Wirtschaftsintegration: Neuere Ans├Ątze / New Theories on the Growth Effects of Economic Integration," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 222(1), pages 64-79, February.
    5. Gries, T. & Grundmann, R. & Palnau, I. & Redlin, M., 2015. "Does technological change drive inclusive industrialization? : A review of major concepts and findings," MERIT Working Papers 044, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    6. Ottaviano, Gianmarco I. P. & Puga, Diego, 1997. "Agglomeration in a global economy: a survey," LSE Research Online Documents on Economics 20324, London School of Economics and Political Science, LSE Library.

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