Application of Keynesian theory and new economic geography in Portugal. An alternative analysis

Martinho, Vítor João Pereira Domingues (2011): Application of Keynesian theory and new economic geography in Portugal. An alternative analysis.

Abstract

This work aims to test the Verdoorn Law, with the alternative specifications of (1)Kaldor (1966), for five Portuguese regions (NUTS II) from 1986 to 1994. It is intended to test, even in this work, the alternative interpretation of (2)Rowthorn (1975) of the Verdoorn's Law for the same regions and periods. The results of this work will be complemented with estimates of these relationships to other sectors of the economy than the industry (agriculture and services sectors) and for the total economy of each region. This work aims, yet, to study the Portuguese regional agglomeration process, using the linear form the New Economic Geography models that emphasize the importance of spatial factors (distance, costs of transport and communication) in explaining of the concentration of economic activity in certain locations. In a theoretical context, it is intended, also, to explain the complementarily of clustering models, associated with the New Economic Geography, and polarization associated with the Keynesian tradition, describing the mechanisms by which these processes are based.

• Item Type: MPRA Paper
• Language: English
• Keywords: agglomeration; polarization; Portuguese regions; linear models
• Subjects: C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C23 - Panel Data Models ; Spatio-temporal Models; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R12 - Size and Spatial Distributions of Regional Economic Activity; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O14 - Industrialization ; Manufacturing and Service Industries ; Choice of Technology

References

N. Kaldor. Causes of the Slow Rate of Economics of the UK. An Inaugural Lecture. Cambridge: Cambridge University Press, 1966.

R.E. Rowthorn. What Remains of Kaldor Laws? Economic Journal, 85, 10-19 (1975).

M. Fujita; P. Krugman; and J.A. Venables. The Spatial Economy: Cities, Regions, and International Trade. MIT Press, Cambridge 2000.

F. Targetti and A.P. Thirlwall. The Essential Kaldor. Duckworth, London 1989.

P.J. Verdoorn. Fattori che Regolano lo Sviluppo Della Produttivita del Lavoro. L´Industria, 1, 3-10 (1949).

V.J.P.D. Martinho. The Verdoorn law in the Portuguese regions: a panel data analysis. MPRA Paper 32186, University Library of Munich, Germany (2011a).

V.J.P.D. Martinho. Regional agglomeration in Portugal: a linear analysis. MPRA Paper 32337, University Library of Munich, Germany (2011b).

G. Hanson. Regional adjustment to trade liberalization. Regional Science and Urban Economics (28), 419-444 (1998).