spatial inequalities 2 - causes of spatial differences Flashcards
what type of model is the convergent growth?
it uses the neoclassical supply based growth model
what is the outcome of convergent growth/
diminishing returns to factors of production
growth of national economy given and spatial growth is a zero sum allocation and distribution of production
growth of one region is at expense of another
predicts convergence between regions as mobile labour and capital migrate to obtain highest returns
what models are divergent growth?
kaldorian and new economic geography models are examples of divergent growth
what is the outcomes of divergent growth?
increasing returns ( especially due to agglomeration spillovers)
growth of national economy outcome of different spatial growth rates
additional growth can be from improvements in spatial efficiency rather than just additional factor inputs (equity)
predicts divergence between regions due to cumulative causation (reguibs with absolute advantages grow faster and benefit from concentration/ agglomeration)
what are examples of cause and effect for which structural change has led to creative destructive?
1) rapid technological progress - deindustrialisation/ growth KIBS
2) globalisation ( exports, offshoring) - urban rural shift (functional specialisation)
3) growth of consumer and business services - agglomerations/specialisation/size matters
how did martin et al (2021) provide an explanation for divergent growth?
structural change has led to creative destuction
hence martin et al shows effects of these outcomes for example rapid technological progress led to deindustrialization/ growth knowledge-intensive business services (KIBS) and these have affected different spatial areas differently
what is the issue of martin et al (2021) explanation of divergent growth?
caution is needed through when interpreting changes in employment - buissnesses in more rural spatial areas are smaller and productivity wise benefit less from scale
also basic question generally ignored or downplayed: is uneven growth due to different endowments or is it due to how different spatial areas perform
how does brandily et al (2022) provide an explaination for divergent growth?
brandily et al also emphaise that deindustrialisation and rise of service led economy,
functional specialisation: changes in telecoms, transportation cost sand firm manager a distance leading to separation of production and management where R&D and innovation took place leading to offshoring and greater use of trade and domestic separation of high values functions in less knowledge intensive areas
the size of the local economy bringing agglomeration economies of scale
more human capital
more physical and intangible capital, latter proxying knowledge base and absorbative capacity
what are the issues with brandily et al (2022) explanation of divergent growth?
the emphasis on changes in relative size, capital and skills of different places concentrates on endowments rather than on productivity differences no due to endowments and the different economic relationships across spatial areas between endowments and economic growth
what does the UK levelling up white paper emphasise on the explanations of divergent growth?
it emphasises:
the central role of productivity
it sees the drivers of productivity as investment in a set of territorial capitals ( physical capital, human capital, intangible [ knowledge embodied in intellectual assets such as R&D], financial capital, social capital [ good housing] institutional capital and leadership)
it sees growth as divergent
what is the conclusion of causes of spatial differences?
growth of spatial economies is divergent not convergent - cumulative causation due to increasing returns as a result of esp agglomeration externlaties and productivity plays central role
structural changes/shocks have led to spatially differentiated creative destruction
size, various capital endowments, complexity and adaptability- all are important
