What do we know about the causes of regional growth? Part 3. ECON 4480 State and Local Economies. Reasons for Growth. We now have three reasons why growth rates can vary among regions: Technical progress may differ between regions. The growth of capital stock may vary between regions.
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ECON 4480 State and Local Economies
Growth of capital stock
Growth of labor force
Natural population growth
Net inmigration of workers
Local R&D, education
Inflow of technical knowledge
Local capital spending by residents
Birth and death rate
Wage rate relative to other regions
Rate of return relative to other regions
Output growth due to…
Note: Other factors includes technical changeTesting the Theory
Regions in the NW and SE quadrants are moving towards (converging) to the national average output per capita. Regions in the NE and SW quadrants are moving away.