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What should Policy Makers Learn from Recent Advances in Growth Theory and New Economic Geography?

Author

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  • Edgar Morgenroth

    (Economic and Social Research Institute (ESRI))

Abstract
During the last decade issues such as growth and convergence, core-periphery structures, and regional development have come to the forefront in policy circles. At the same time as political concerns about regional development increased, new theories of economic growth and economic geography were developed. This paper provides a brief review of this literature and attempts to draw out some policy conclusions. The most fundamental policy implication of the models discussed above is that one needs to understand the mechanisms that determine growth and the location of economic activity. The endogenous growth literature highlights the role of externalities and spillovers which require that governments fulfil the important role to ensure that the engines of growth are supplied at the optimal level. The major contribution of the new economic geography is that it shows that concentration and the emergence of cities is a natural outcome of market interaction.

Suggested Citation

  • Edgar Morgenroth, 2003. "What should Policy Makers Learn from Recent Advances in Growth Theory and New Economic Geography?," Papers WP150, Economic and Social Research Institute (ESRI).
    • Handle: RePEc:esr:wpaper:wp150
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    References listed on IDEAS

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    More about this item

    Keywords

    Endogenous Growth; New Economic Geography; Regional Policy;
    All these keywords.

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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