Remarks on Regional Growth

Part of the Contributions to Economics book series (CE, volume 1)


A model’s purpose is to provide insights about particular features of the world, which requires making simplifying assumptions. The usual procedure is to start with a very simplified model and then make it increasingly realistic; in the process, one comes to a more sophisticated understanding of the actual system (Krugman 1994, p. 53). Hence before starting, one must check what particular feature of the world is actually of interest if the context slightly changes. Section 5.1 reviews some approaches to regional development, including new economic geography. In Sects. 5.2 and 5.3, some particular features of standard neoclassical growth models are reconsidered in view of setting up a model of regional growth.


Human Capital Foreign Direct Investment Gross Domestic Product Saving Rate Trade Cost 


  1. Acs, ZJ (ed) (2000) Regional innovation, knowledge and global change. Pinter, London and New York, NYGoogle Scholar
  2. Armstrong H, Taylor J (2000) Regional economics and policy, 3rd edn. Blackwell, Oxford and Malden, MAGoogle Scholar
  3. Azariadis C, Drazen A (1990) Threshold externalities in economic development. Q J Econ 105:501–526CrossRefGoogle Scholar
  4. Borts GH, Stein JL (1964) Economic growth in a free market Reprint 1966. Columbia University Press, New York, NYGoogle Scholar
  5. Dixit AK, Stiglitz JE (1977) Monopolistic competition and optimum product diversity. Am Econ Rev 67(3):297–308Google Scholar
  6. Fischer MM, Revilla Diez J, Snickars F (2001) Metropolitan systems of innovation – theory and evidence from three metropolitan regions in Europe. Springer, Berlin, Heidelberg and New York, NYGoogle Scholar
  7. Freeman C, Soete L (1994) The economics of industrial innovation Reprint 1997. Pinter, LondonGoogle Scholar
  8. Galbraith JK (2000) Created unequal – the crisis in American pay. The University of Chicago Press, Chicago, ILGoogle Scholar
  9. Hirschman AO (1958) Interregional and international transmission of economic growth. In: Friedmann, J and Alonso, W (eds) (1975): Regional policy – readings in theory and applications. MIT Press, Cambridge, MA and LondonGoogle Scholar
  10. Kaldor N (1970) The case for regional policies. Scott J Polit Econ 17(3):337–348CrossRefGoogle Scholar
  11. Krugman P (1991a) Increasing returns and economic geography. J Polit Econ 99(3):483–499CrossRefGoogle Scholar
  12. Krugman P (1991b) Geography and trade Reprint 1992. MIT Press, Leuven, Leuven University Press and Cambridge, MA and LondonGoogle Scholar
  13. Lucas RE Jr (1990) Why doesn’t capital flow from rich to poor countries? Am Econ Rev 80(2):92–96Google Scholar
  14. Magyar Nemzeti Bank (2007) Foreign Direct Investment – Hungary 1995–2005. Available from:, queried on 09-May-2007
  15. Marshall A (1890) Principles of economics Reprint 1938. Macmillan, LondonGoogle Scholar
  16. Myrdal G (1957) Economic theory and under-developed regions Reprint 1964. Duckworth, LondonGoogle Scholar
  17. Oesterreichische Nationalbank (2006) Sonderheft Statistiken: Direktinvestitionen 2004. Oesterreichische Nationalbank, ViennaGoogle Scholar
  18. Richardson HW (1973) Regional growth theory. Macmillan, London and BasingstokeGoogle Scholar
  19. Sinn H-W (2004) Ist Deutschland noch zu retten? Econ, MunichGoogle Scholar
  20. Statistik Austria (2005) Volkswirtschaftliche Gesamtrechnungen 1976–2004. Statistik Austria, ViennaGoogle Scholar
  21. Hatzichronoglou T (1997) Revision of the high-technology sector and product classification, Technology and Industry Working Papers 1997/2Google Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 2011

Authors and Affiliations

  1. 1.Department of SocioeconomicsVienna University of Economics and Business, Institute for Economic Geography and GIScienceViennaAustria

Personalised recommendations