A Model of Regional Growth Rate Differences on Kaldorian Lines

Anthony Thirlwall

Chapter 12 in Essays on Keynesian and Kaldorian Economics, 2015, pp 286-301 from Palgrave Macmillan

Abstract: Abstract Professor Kaldor has been a long standing critic of the application of neo-classical modes of thought to the analysis of economic growth and development. In recent years, in particular, he has followed the line of Myrdal [1] in attacking the predictions of neo-classical theory that regional (national) growth rate differences will tend to narrow with trade and the free mobility of the factors of production. The essence of the argument is that once a region gains a growth advantage it will tend to sustain that advantage through the process of increasing returns that growth itself induces—the so-called Verdoorn effect [2]. The fullest statement of Kaldor’s views at the regional level is contained in a lecture to the Scottish Economic Society published in 1970 [3]. Unfortunately the model he presents is purely verbal and lacks the rigour and precision that one normally associates with Kaldor. The purpose here is to attempt to formalize the model in order to clarify its structure,1 and to consider such questions as: the role of the Verdoorn effect in contributing to regional growth rate differences; whether regional growth rate differences will tend to narrow or diverge through time; and how policies of regional ‘devaluation’ can raise a region’s growth rate.2

Keywords: Unit Labour Cost; Policy Conclusion Point; Wage Subsidy; Export Demand; Money Wage (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: A Model of Regional Growth-Rate Differences on Kaldorian Lines (1975)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:pshchp:978-1-137-40948-5_13

Ordering information: This item can be ordered from
http://www.palgrave.com/9781137409485

DOI: 10.1057/9781137409485_13

Access Statistics for this chapter

More chapters in Palgrave Studies in the History of Economic Thought from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().