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Economic activity of all types is moving in the direction of globalization. There is an increasingly expanding web of linkages and interconnections between states, societies and organization that make up contemporary world economic systems. Irrespective of the significance of understanding regional economic phenomena, regional economic theory is a relatively neglected area of economic analysis. Except many possible reasons for the negligence, it is argued that analytical difficulties associated with modeling dynamics of interregional economic interactions are a main obstacle to progress in regional economics. (1956) assures: “the general theory of location and space-economy is conceived as embracing the total spatial array of economic activities, with attention paid to the geographical distribution of inputs and outputs and the geographical variations in prices and costs”. The necessity of establishing dynamic regional theories has been recognized. Nevertheless, the traditional equilibrium economics and neoclassical growth theory, which have formed the two mainstreams of theoretical economics, fail to explain the complexity of economic geography. Although regional scientists and regional economists have proposed various kinds of regional dynamic models (e.g., Richardson, 1977, Henderson, 1985, Arnott, 1996a, 1996b, Zhang, 1997a, Fujita et al., 1999, Walz, 1999), as argued by (1992), the current models do not integrate the spatial factor satisfactorily from the theoretical point of view. As they demonstrate in their comprehensive review on economics with space, “integrating space and competition demands at the same time a certain dose of abnegation (abandon the familiar model of perfect competition) and of imagination (invent a new model of competition)” (1992). This book builds a few dynamic models of interregional economies to illustrate a way of “embracing the total spatial array of economic activities [with an integration of space and competition, as well as] with attention paid to the geographical distribution of inputs and outputs and the geographical variations in prices and costs”.
KeywordsCapital Accumulation Economic Geography Regional Amenity Agglomeration Economy Knowledge Accumulation
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