Faculty of Economics and Business Administration Publications Database

Divergent Regional Development, Factor Mobility, and Nontraded Goods

Matthias, Premer
Volume: 24
Number: 6
Pages: 707 - 722
Month: December
ISSN-Print: 0166-0462
Link External Source: Online Version
Year: 1994
Keywords: Regional economics; Consumer goods; All Other Consumer Goods Rental
Abstract: Using an endogenous growth model with learning-by-doing effects in the production of a traded good, we derive divergent regional-growth paths in a two-region-three-good setting. A nontraded-goods sector using a mobile as well as an immobile factor of production provides the possibility of a steady-state equilibrium with a dispersed distribution of mobile workers. The paper investigates regional specialization, trade, and migration patterns in the steady-state equilibrium as well as in the transition process towards the steady-state. The long-run production and trade patterns of the regions are determined by history-dependent processes.