Geography, Endogenous Growth and Innovation

Abstract

If we are to understand why some regions grow and others stagnate there are three funda- mental questions that need to be answered. First, Why and when does economic activity become concentrated in a few regions leaving others relatively underdeveloped? Second, What role does technological change play in regional economic growth? Third, How does technological advance occur, and what are the key processes and institutions involved? In order to answer these three questions we survey three separate and distinct literatures that have a long and distinguished history, and alt three have been recently reexamined. They are: the new economic geography (Krugman 1990), the new growth theory (Romer 1990), and The new economics of innovation (Nelson 1993).