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Economic Dynamics and Regional Diversity — Some Evolutionary Ideas

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Wealth from Diversity

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

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Abstract

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.

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Authors and Affiliations

  1. PREST and Department of Economics, University of Manchester, USA

    J. S. Metcalfe

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  1. J. S. Metcalfe
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Editors and Affiliations

  1. IDEGA, University of Santiago de Compostela, Galicia, Spain

    Xavier Vence-Deza (Professor of Applied Economics) (Professor of Applied Economics)

  2. PREST and Faculty of Economics, University of Manchester, England

    John Stanley Metcalfe (Professor of Economics) (Professor of Economics)

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© 1996 Springer Science+Business Media Dordrecht

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Metcalfe, J.S. (1996). Economic Dynamics and Regional Diversity — Some Evolutionary Ideas. In: Vence-Deza, X., Metcalfe, J.S. (eds) Wealth from Diversity. Economics of Science, Technology and Innovation, vol 9. Springer, Boston, MA. https://doi.org/10.1007/978-1-4757-6964-7_3

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  • DOI: https://doi.org/10.1007/978-1-4757-6964-7_3

  • Publisher Name: Springer, Boston, MA

  • Print ISBN: 978-1-4419-4759-8

  • Online ISBN: 978-1-4757-6964-7

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