A non-linear dynamic model of spatial economic development and R&D policy

P. Nijkamp, H. J. Poot*, J. Rouwendal

*Corresponding author for this work

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

This paper addresses the issue of economic development from the perspective of productivity increases generated by technological progress emerging from R&D expenditures. The long-run evolutionary path of spatial systems (countries, regions, cities etc.) is analyzed by means of a multi-regional dynamic (discrete-time) model incorporating the spatial transfer of technological change. While a positive feedback exists between R&D and economic growth, the production of new technology itself exhibits decreasing returns. Moreover, capacity constraints also limit growth. The stability conditions associated with R&D and innovation diffusion are extensively studied. It will be demonstrated that the system concerned can generate a wide range of dynamic behaviour, including chaotic evolutions of the May-type. Simulations illustrate this. For example, economic fluctuations can be amplified through innovation diffusion.

Original languageEnglish
Pages (from-to)287-302
Number of pages16
JournalThe Annals of Regional Science
Volume25
Issue number4
DOIs
Publication statusPublished - 1 Dec 1991

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