90-00
Universität Siegen
Fachbereich
Wirtschaftswissenschaften, Wirtschaftsinformatik und
Wirtschaftsrecht
Volkswirtschaftliche Diskussionsbeiträge
Walter Buhr
A Macroeconomic Growth Model of Competing Regions
In the growth context, this paper concentrates on the
supply-demand determination of regional equilibrium incomes in
regional goods markets as a framework for discussing the
implications of competition among regions. Prices at the
regional and national level are fixed so that all variables are
of real magnitudes; there are no money markets. Regional factor
stocks (private and public capital, labor force in the form of
human capital) and regional demand set up the barriers to
economic growth (cf. generally Barro, Sala-i-Martin (1995)).
The analysis is restricted to two regions embedded in the
State. The supply side of the model is represented by different
regional production functions which generate regional factor
demand. Demand-side determination of equilibrium regional
incomes arises from the definitions of national accounting
enriched by basic behavioral relationships. Substantial
consideration is given to the equalization of regional supply
and demand in diverging cases (e.g., excess demand in one of
the two regions). Changes in factor stocks (differential
equations) maintain the dynamics of the model. Regional
competition is expressed by variations of regional and state
parameters. Their numerical influences on growth will be dealt
with in Bobzin (2000).