Public Policies, Regional Inequalities and Growth
Philippe Martin
No 1841, CEPR Discussion Papers from C.E.P.R. Discussion Papers
Abstract:
This paper constructs a two-region endogenous growth model, where economic geography and public infrastructures play a key role. The model allows us to analyse the contribution of different types of redistributive public policies on growth, industrial geography and spatial income distribution. An improvement of infrastructures that helps decrease transaction costs inside the richest region increases spatial concentration of industries, increases the growth rate, and decreases the gap in income between the two regions. An improvement in infrastructure in the poor region has the exact reverse effect. In this sense, the paper highlights a non-trivial political trade-off between growth and spatial distribution of economic activities. Contrary to transfers and traditional regional policies, it is shown that a public policy that reduces the cost of innovation can attain the objectives of higher growth and more even spatial distribution of incomes and economic activities. From that point of view, these policies seem preferable to the regional policies that are now implemented in Europe.
Keywords: Geography; Growth; Infrastructure; Innovation; Public Policies (search for similar items in EconPapers)
JEL-codes: O40 R12 R58 (search for similar items in EconPapers)
Date: 1998-03
References: Add references at CitEc
Citations: View citations in EconPapers (5)
Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=1841 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
Related works:
Journal Article: Public policies, regional inequalities and growth (1999) 
Working Paper: Public Policies, Regional Inequalities and Growth (1999)
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:cpr:ceprdp:1841
Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... ers/dp.php?dpno=1841
Access Statistics for this paper
More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().