Regional Economics and Policy

Harvey Armstrong is Professor of Economic Geography at Sheffield University. He has previously worked at Loughborough University and Lancaster University and has held a visiting appointment at the University of British Columbia. He has published extensively in the areas of regional policy, European regional disparities, local economic development policy and the economic performance of world micro-states and dependent territories. Jim Taylor is Professor of Economics at the Lancaster University and has held visiting appointments at the Universities of Pennsylvania, British Columbia and Melbourne. His research includes work on the evaluation of regional policy and on various aspects of education economics. He has published many papers and several books on regional policy and has been the editor of Regional Studies, the journal of the Regional Studies Association.

• Preface to the third edition ixPart I Regional economics 11 Regional income and employment determination 51.1 Impact analysis: indirect and induced effects 71.2 The Keynesian income–expenditure approach 81.3 Applications of regional multiplier analysis 151.4 Weaknesses of regional multiplier analysis 201.5 A multi-region model of income determination 211.6 Further developments in the economic modelling of regions 271.7 Regional econometric models 301.8 Conclusion 33Further reading 342 The input–output approach to modelling the regional economy 352.1 The input–output method 372.2 Regional applications of input–output analysis 492.3 Some limitations of the input–output approach 562.4 New developments in regional modelling 582.5 Conclusion 62Further reading 633 Regional growth disparities: neoclassical perspectives 643.1 Regional growth disparities: some facts 663.2 The neoclassical growth model 663.3 Identifying the components of economic growth in practice 723.4 Endogenous technological progress: the engine of growth 763.5 Technology transfer between regions: catching up with the technology leaders 793.6 The convergence of regional per capita incomes in practice 813.7 Extending the neoclassical growth model 853.8 Conclusion 88Further reading 894 Export demand models, agglomeration and cumulative growth processes 904.1 The demand for a region’s output: the export-base approach 914.2 Regional exports and cumulative causation: a model of regional growth 944.3 A constraint on regional growth: the balance of payments 1014.4 Some alternative explanations of cumulative growth 1044.5 Trade costs, industrial clusters and regional growth 1074.6 Evidence of the economic benefits of industrial agglomeration 1094.7 The spatial concentration of the financial sector in core regions 1114.8 Empirical studies of cumulative growth processes 1134.9 Conclusion 117Further reading 1185 Interregional trade 1195.1 The basis of regional trade specialization 1225.2 More modern theories of regional trade 1315.3 Conclusion 138Further reading 1396 Interregional migration 1406.1 The classical theory of labour migration 1416.2 Interregional migration in Great Britain, 1961–96 1436.3 The determinants of migration: relaxing the assumptions of the classical model 1476.4 Alternatives to the classical theory of migration 1536.5 Migration during periods of recession 1586.6 The effects of migration: Is migration equilibrating? 1626.7 Conclusion 164Further reading 1657 Regional unemployment disparities 1667.1 Regional unemployment disparities: Why do they persist? 1687.2 The causes of unemployment: the conventional approach 1757.3 Estimating the relative importance of the various types of unemployment 1797.4 Empirical studies of regional disparities in unemployment 1847.5 Socio-demographic causes of unemployment: evidence from the UK 1927.6 Hidden unemployment 1957.7 Conclusion 200Further reading 201Part II Regional policy 2038 The case for regional policy: British experience 2058.1 The case for reducing regional economic disparities 2068.2 Policy action: alternative approaches 2098.3 The historical development of regional policy in Britain 2148.4 Regional policy: economic efficiency or social inclusion? 2258.5 Conclusion 230Further reading 2319 Regional policy instruments 2329.1 Micro-policy instruments and regional policy 2349.2 Controls on businesses: location controls or pro-business measures? 2399.3 Capital subsidies versus labour subsidies 2419.4 Community economic development initiatives 2549.5 Conclusion 261Further reading 26210 Indigenous development: small and medium enterprises and technological progress 26310.1 Regional policy and the SME sector 26410.2 Regional policy and new technology 28610.3 Industrial districts, innovative milieux and ‘learning regions’ 29210.4 Conclusion 300Further reading 30211 Regional policy and the European Union 30311.1 Regional problems in the European Union 30411.2 Regional policy in the European Union 31911.3 Existing EU regional policy 32411.4 Conclusion 334Further reading 33512 Regional policy and devolution 33612.1 The changing system of regional governance 33712.2 The regional implications of centralized control 34112.3 Partial devolution: allocating fiscal policy powers to regional authorities 35212.4 The complete devolution of fiscal, monetary and trade policy powers 35912.5 Conclusion 360Further reading 36113 The evaluation of regional policy 36213.1 The evaluation process 36413.2 Aggregate studies of the effect of regional policy on employment trends in the assisted areas 36813.3 Estimating the effect of regional policy on inward investment into the assisted areas 37013.4 Regional policy and foreign inward investment 37413.5 Surveys of assisted firms 38313.6 Ex ante evaluation of regional incentives using the cost–benefit approach 38813.7 Using large-scale regional models to estimate policy impacts 39313.8 Evaluation of regional development programmes: the EU’s Structural Funds 39613.9 Conclusion 400Further reading 401References and bibliography 402Index 429

"The authors' careful scholarship, intellectual rigour and clear analysis of mainstream theory means that this new edition of Regional Economics and Policy will continue as a standard work for students. The book provides an excellent synthesis of theoretical and empirical work on regional economic concepts and theories, leading to clear and important lessons for policy. It successfully brings updated literature and new material to bear on the key issues in the field." Ronald McQuaid, Napier University "This is an excellent textbook on regional economic theory and policy. This edition has been comprehensively revised to take account of the recent revival of interest in regional issues and the consequent burgeoning literature in the field. The book presents recent developments in the context of earlier work and both are discussed in a succinct and masterly fashion. This book will continue to remain the definitive overview of the subject and will be widely consulted by all those interested in the regional aspects of economic activity." John McCombie, University of Cambridge