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Does the neoclassical growth model predict interregional convergence? On the impact of free factor movement and the implications for the European Union

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  • Sascha Sardadvar

Abstract

This paper sets up a theoretical model of regional growth with free factor movement. The analysis shows that factor endowments are crucial for a region’s attractiveness regarding factor relocations. In particular, lower endowments of human capital within other regions are advantageous for a region’s growth prospects, and vice versa. The paper concludes that under the framework of free factor movement, the European Union’s objective of interregional convergence can only be achieved by subsidising disadvantaged economies. Â

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  • Sascha Sardadvar, 2013. "Does the neoclassical growth model predict interregional convergence? On the impact of free factor movement and the implications for the European Union," Economics and Business Letters, Oviedo University Press, vol. 2(4), pages 161-168.
    • Handle: RePEc:ove:journl:aid:10026
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    File URL: https://reunido.uniovi.es/index.php/EBL/article/view/10026
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    1. Sascha SARDADVAR, 2016. "Regional Economic Growth And Steady States With Free Factor Movement: A Theoretical Model With Evidence From Europe," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 43, pages 21-57.
    2. Ermelinda Meksi & Ermelinda Xhaja (Gjika), 2017. "Income and structural convergence of Western Balkans to European Union," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 14(1), pages 141-154, June.

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