Abstract
The author develops a multiregional growth model with endogenous amenity and capital accumulation for any number of regions. The simulation results demonstrate that the national dynamics have a unique equilibrium. Comparative statics analysis shows that, if environmental improvement occurs in the technologically advanced (less advanced) region, the national output rises (falls). As a region improves its technology, the other two regions' aggregated output levels fall—not only in relative, but also in absolute, terms. This implies that if any region has a high rate of technological change and the other regions remain technologically stationary, then economic activities will tend to be concentrated in the technologically advancing region. It is also shown that technological differences appear to play only a small role in accounting for spatial wage disparities and endowments.
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