Long Waves and Uneven Regional Growth

Abstract

In recent years the phenomenon of uneven economic growth between different regions of the country has received increasing attention in the academic literature [16;17;20;27]. The conventional explanation of uneven growth centers on disparities between regions in such things as unionization, labor costs, local taxes, energy costs, climate, extent of local government regulation, the availability of technology, and access to markets. The purpose of the present paper is to suggest that uneven regional development is a manifestation of regional long waves of economic growth and decline, and that disparities between regions in such things as unionization, labor costs, and taxes are simply the result of different regions being at different phases of development in their respective long waves. The essence of the view to be presented in the following pages is that regions experience long periods of sustained rapid economic growth followed by relatively lengthy periods of slow economic growth or economic decline. The growth retardation stage of the long wave sets up the conditions for an eventual economic recovery and a return to a more rapid rate of growth. The first section of the paper will be devoted to presenting the theoretical underpinnings of regional long waves. Supporting empirical evidence will be provided in the second section.