REGIONAL ECONOMIC GROWTH AND STEADY STATES WITH FREE FACTOR MOVEMENT: A THEORETICAL MODEL WITH EVIDENCE FROM EUROPE

Sascha Sardadvar ()
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Sascha Sardadvar: Institute for Economic Geography and GIScience, WU Vienna

Region et Developpement, 2016, vol. 43, 21-57

Abstract: This paper develops a spatial theoretical growth model in order to study the impact of physical and human capital relocations on the growth of open economies. Analytical and simulation results show how the respective neighbours determine an economy’s development, why convergence and diver-gence may alternate in the medium run, and that interregional migration as a consequence of interregional wage inequalities causes disparities to prevail in the long run. The empirical part applies spatial econometric specifications for European regions on the NUTS2 level for the observation period 2000-2013. The estimations underline the importance of human capital endowments and its relation with spatial location.

Keywords: NEOCLASSICAL GROWTH THEORY; HUMAN CAPITAL; IN-TERREGIONAL MIGRATION; CONVERGENCE; DIVERGENCE; EUROPEAN INTEGRATION (search for similar items in EconPapers)
JEL-codes: C31 F43 R11 (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:tou:journl:v:43:y:2016:p:21-57

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