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Inclusive growth from an urban perspective: a challenge for the metropolis of the 21st century

Joan Trullén () and Vittorio Galletto ()
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Joan Trullén: Department of Applied Economy, Universitat Autònoma de Barcelona

No 1701, IERMB Working Paper in economics from Institut d'Estudis Regionals i Metropolitans de Barcelona

Abstract: Between 1985 and 2008 the metropolis of Barcelona experienced a strong growth in economic activity and employment, which was accompanied by improvements in income distribution. The nomination of Barcelona as the host city of the 1992 Olympic Games and the entrance to the European Communities in January 1986 were crucial to activate from the city of Barcelona a powerful and original economic and urban policy aimed at promoting a new model inclusive of urban growth.The recent long period of economic growth and employment growth made it possible to advance in a model of metropolitan inclusive growth, with significant improvements in the distribution of personal income. Nevertheless, the economic crisis that began in 2008 resulted in an intense job loss and a decline in general economic activity. The Gini index of disposable income in the metropolitan area of Barcelona during the period 2008-2013 worsened returning to levels close to those of 1995. The present work explores the adjustment mechanisms of the labor market in Barcelona in response to the fall in economic activity during the recession, with a special emphasis on unemployment by geographical origin (foreign non-EU nationals) and age (young people). It also identifies the central role in ending the crisis that have had external demand and, therefore, highlights manufacturing as key in the economic recovery. The transition towards a model of inclusive urban growth must be articulated with this central idea: the recovery from the crisis will be based in manufacturing and external demand. And, therefore, it should be stressed the central role of productivity growth policies designed with territorial criteria. Instead of guiding external competitiveness based on reduced labor costs, it is necessary an alternative strategy: to return to a growth model based on inclusive urban growth based in manufacturing exports, strengthening the knowledge economy by promoting advanced services and strengthening the metropolitan infrastructure. This is the new metropolitan strategy of inclusive growth. Metropolises are an appropriate level to face the major challenges of the XXI century: economic growth, employment growth and productivity growth based on export growth. Territorial factors are critical to growing productivity. The metropolitan policies will be decisive for an inclusive growth model as the one proposed for Barcelona.

Keywords: Inclusive urban growth; metropolis; Marshallian Industrial District (search for similar items in EconPapers)
JEL-codes: D31 O18 R58 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2017-11
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