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This paper models externalities of production across regional economies. Under the assumption that knowledge diffuses without political or administrative barriers, we derive externalities that affect the steady state and the process of growth of each economy. The empirical counterpart of the reduced form equation summarizing the process of growth allows us to test for the presence of regional spillovers and to measure their magnitude. Our results for a sample of European regions show that spillovers are far from negligible, are robust to the consideration of variables within each region, and may cause nondecreasing returns at the spatial aggregate level. The paper also relates previous empirical evidence on spatial dependence in growth studies to the externalities modeled here. [ABSTRACT FROM AUTHOR]

How does the research about rural economies in developed countries compare to urban/regional economics? What can the new generation contribute? This paper briefly reviews modern research concerning rural development in one country, the U.S., and reports indicators of U.S. rural distress. It examines the market forces and market failures that cause rural distress and that may limit the applicability of existing urban/regional theories to rural problems. A feast of uniquely rural issues that require—and should inspire—theoretical innovations in rural, urban, regional, and spatial economics are identified and discussed. [ABSTRACT FROM AUTHOR]

It is common in empirical regional economics to use total employment as an explanatory variable while investigating issues such as the level and distribution of income and migration. This paper argues that sector-specific changes in employment and labor market performance can have different effects on economic growth, the collection of tax revenue, migration, and the level and distribution of household income. As such, it is important to model sectors separately. We find that expansions in employment opportunities for a high-wage sector such as computer manufacturing or bioengineering, a medium-wage sector manufacturing, and the lower-wage sector of retailing have differing economic consequences for a small city. We use a data intensive computable general equilibrium model to obtain these results. [ABSTRACT FROM AUTHOR]

This paper reexamines the issue of output convergence among the 48 states in the continental United States. Implementing multiple panel data techniques to state per capita output during the period 1929–2001 reveals little evidence of stochastic convergence in all 48 states, but some evidence among collections of states at the regional level. This observation may suggest that output convergence in the United States has proceeded among geographically neighboring states rather than among distant states, notwithstanding the nearly complete integration of product and factor markets. Our findings appear to be robust to a subsample analysis, although the intensity of convergence varies with the choice of output measure and deflator. Industrial structures and geographic proximity are considered as potential explanations for the regional pattern of output growth dynamics. [ABSTRACT FROM AUTHOR]