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Regional Economies, Innovation and Competitiveness in a System Dynamics Representation

  • Ugo FRATESI

    ([n.a.])

The System Dynamics methodology is used in this article as unifying approach in order to show how a number of theories about the performance of territories developed in the past 20 years can integrate the one with the other; to demonstrate this, a model of local economy coherent with these schools is constructed and simulated. According to these theories, the ability to produce and use knowledge is at the centre of regional competitiveness in the advanced world; the model and the paper illustrate the elements of the local economic system and how they have to work coherently towards the continuous process of innovation, needed to be successful. The model also shows in a new framework how, due to the cumulative nature of this innovation process, it is possible to obtain equilibria with regional income di®erentiation, even in the presence of identical territories. When this is the case, structural policies, aiming to allow lagging regions to better innovate and/or imitate external knowledge, are appropriate.

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File URL: http://docs.dises.univpm.it/web/quaderni/pdf/204.pdf
File Function: First version, 2004
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Paper provided by Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali in its series Working Papers with number 204.

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Length: 47
Date of creation: Feb 2004
Date of revision:
Handle: RePEc:anc:wpaper:204
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  1. Ugo Fratesi, 2003. "Innovation Diffusion and the Evolution of Regional Disparities," ERSA conference papers ersa03p327, European Regional Science Association.
  2. Paul Krugman, 1990. "Increasing Returns and Economic Geography," NBER Working Papers 3275, National Bureau of Economic Research, Inc.
  3. Barro, R.J. & Sala-I-Martin, X., 1991. "Convergence Across States and Regions," Papers 629, Yale - Economic Growth Center.
  4. Bengt-ake Lundvall & Bjorn Johnson, 1994. "The Learning Economy," Industry and Innovation, Taylor & Francis Journals, vol. 1(2), pages 23-42.
  5. Dixit, Avinash K & Stiglitz, Joseph E, 1975. "Monopolistic Competition and Optimum Product Diversity," The Warwick Economics Research Paper Series (TWERPS) 64, University of Warwick, Department of Economics.
  6. Ellison, G. & Glaeser, E.L., 1994. "Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach," Working papers 94-27, Massachusetts Institute of Technology (MIT), Department of Economics.
  7. Fujita, Masahisa & Thisse, Jacques-François, 1996. "Economics of Agglomeration," CEPR Discussion Papers 1344, C.E.P.R. Discussion Papers.
  8. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
  9. Andrés Rodríguez-Pose & Ugo Fratesi, 2003. "Between development and social policies: the impact of European Structural Funds in Objective 1 Regions," European Economy Group Working Papers 28, European Economy Group.
  10. Paul M Romer, 1999. "Endogenous Technological Change," Levine's Working Paper Archive 2135, David K. Levine.
  11. P Cooke & M G Uranga & G Etxebarria, 1998. "Regional systems of innovation: an evolutionary perspective," Environment and Planning A, Pion Ltd, London, vol. 30(9), pages 1563-1584, September.
  12. Dosi, Giovanni, 1988. "Sources, Procedures, and Microeconomic Effects of Innovation," Journal of Economic Literature, American Economic Association, vol. 26(3), pages 1120-71, September.
  13. Michele Boldrin & Fabio Canova, 2001. "Inequality and convergence in Europe's regions: reconsidering European regional policies," Economic Policy, CEPR;CES;MSH, vol. 16(32), pages 205-253, 04.
  14. Smith, Peter C. & van Ackere, Ann, 2002. "A note on the integration of system dynamics and economic models," Journal of Economic Dynamics and Control, Elsevier, vol. 26(1), pages 1-10, January.
  15. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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