What should Policy Makers Learn from Recent Advances in Growth Theory and New Economic Geography?

Edgar Morgenroth

No WP150, Papers from Economic and Social Research Institute (ESRI)

Abstract: During the last decade issues such as growth and convergence, core-periphery structures, and regional development have come to the forefront in policy circles. At the same time as political concerns about regional development increased, new theories of economic growth and economic geography were developed. This paper provides a brief review of this literature and attempts to draw out some policy conclusions. The most fundamental policy implication of the models discussed above is that one needs to understand the mechanisms that determine growth and the location of economic activity. The endogenous growth literature highlights the role of externalities and spillovers which require that governments fulfil the important role to ensure that the engines of growth are supplied at the optimal level. The major contribution of the new economic geography is that it shows that concentration and the emergence of cities is a natural outcome of market interaction.

Keywords: Endogenous Growth; New Economic Geography; Regional Policy (search for similar items in EconPapers)
JEL-codes: O18 O40 R12 R58 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2003-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:esr:wpaper:wp150

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