A Spatial Model of Growth: Taking Technology Seriously
This paper attempts to develop a spatial model of economic growth in which technology and externalities are assumed to be accountable for production in geographical space. Linking externalities to the extent of intensity of production across locations in continuous space, we introduce spatial range into the production function for technological, human, and physical capitals. Our model argues that the long-run growth rate of an economy is determined not just by the growth rates of the three factors of production but by their rates of change in spatial range over the territory of the economy. In other words, spatial intensity and accumulation matter for growth. Our model is consistent with studies on knowledge spillovers, geographical agglomeration, urban and regional growth, and trade. The primary policy implication of our model is the significance of establishing efficient mechanisms or channels that promote innovation, diffusion, trade, and factor mobility over the territory of an economy. It is not as if we always have it everywhere, but there is a process in which knowledge is being created all the time in different places, and is then being diffused. This evolving distribution should be reflected in a model of production, if it is to describe an entire economy in which different people know different things. As a consequence, the idea of an aggregate production function becomes very dubious, unless a new variable is introduced, representing the distribution and diffusion of new knowledge.
|Date of creation:||May 2006|
|Date of revision:|
|Contact details of provider:|| Postal: Kahlaische Strasse 10, D-07745 Jena|
Phone: +49-3641-68 65
Fax: +49-3641-68 69 90
Web page: http://www.econ.mpg.de/
More information through EDIRC
|Order Information:|| Web: http://www.econ.mpg.de/english/research/EGP/discuss.php Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Fujita, Masahisa & Thisse, Jacques-François, 2002.
"Does Geographical Agglomeration Foster Economic Growth? And Who Gains and Looses From It?,"
CEPR Discussion Papers
3135, C.E.P.R. Discussion Papers.
- Masahisa Fujita & Jacques-François Thisse, 2003. "Does Geographical Agglomeration Foster Economic Growth? And Who Gains and Loses from It?," The Japanese Economic Review, Japanese Economic Association, vol. 54(2), pages 121-145.
- Philippe Martin & Gianmarco Ottaviano, 2001.
"Growth and Agglomeration,"
Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers)
- Börje Johansson & John Quigley, 2003.
"Agglomeration and networks in spatial economies,"
Economics of Governance,
Springer, vol. 83(1), pages 165-176, October.
- Johansson, BÃ¶rje & Quigley, John M., 2004. "Agglomeration and Networks in Spatial Economies," Berkeley Program on Housing and Urban Policy, Working Paper Series qt6g49t7n4, Berkeley Program on Housing and Urban Policy.
- 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 630-40, June.
- Barro, Robert J, 1999.
"Notes on Growth Accounting,"
Journal of Economic Growth,
Springer, vol. 4(2), pages 119-37, June.
- Paul Krugman, 1990.
"Increasing Returns and Economic Geography,"
NBER Working Papers
3275, National Bureau of Economic Research, Inc.
- Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992.
"Growth in Cities,"
3451309, Harvard University Department of Economics.
- Henderson, Vernon, 2003. "The Urbanization Process and Economic Growth: The So-What Question," Journal of Economic Growth, Springer, vol. 8(1), pages 47-71, March.
- Esteban Rossi-Hansberg, 2005. "A Spatial Theory of Trade," American Economic Review, American Economic Association, vol. 95(5), pages 1464-1491, December.
- Fine, Ben, 2000. "Endogenous Growth Theory: A Critical Assessment," Cambridge Journal of Economics, Oxford University Press, vol. 24(2), pages 245-65, March.
- Gort, Michael & Konakayama, Akira, 1982. "A Model of Diffusion in the Production of an Innovation," American Economic Review, American Economic Association, vol. 72(5), pages 1111-20, December.
- Papageorgiou, Yorgo Y & Smith, Terrence R, 1983. "Agglomeration as Local Instability of Spatially Uniform Steady-States," Econometrica, Econometric Society, vol. 51(4), pages 1109-19, July.
When requesting a correction, please mention this item's handle: RePEc:esi:egpdis:2006-12. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kerstin SchÃ¼ck)
If references are entirely missing, you can add them using this form.