Economic Dynamics and Regional Diversity — Some Evolutionary Ideas

Part of the Economics of Science, Technology and Innovation book series (ESTI, volume 9)


My purpose in this brief note is to sketch some evolutionary perspectives on the process of regional development. Our starting point is the central stylized fact of modern economic growth, namely its uneven incidence across space and time, and I shall suggest that this diversity of growth experience is both a consequence of and a cause of evolutionary change. Increasing returns and cumulative phenomena play an important part in this story and we shall see how increasing returns work out in an evolutionary model. In this way we can identify the relation between familiar Kaldor/Verdoom mechanism, which has been widely discussed in the regional context, and what I shall call the Fisher mechanism, which has its roots in evolutionary dynamics. My second subsidiary theme will be that while private firms are at the leading edge of the development process, they do not operate in isolation but rather in terms of a wider institutional matrix of supporting activities. This is particularly so with respect to those activities where private behaviours are imperfect and among these the behaviours relating to the accumulation of human and intellectual capital are of prominent importance. Indeed this is a theme extensively explored in the “new growth” theory [Romer (1986, 1990), Lucas (1988)] but it was not unknown in the “old growth” theory either, as the briefest acquaintance with the Marshallian concept of external economies demonstrates.


Unit Cost Evolutionary Game Constant Return Economic Dynamics External Economy 
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Copyright information

© Springer Science+Business Media Dordrecht 1996

Authors and Affiliations

  1. 1.PREST and Department of EconomicsUniversity of ManchesterUSA

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