A REGIONAL EQUILIBRIUM GROWTH-MODEL AND ITS DISEQUILIBRIUM DYNAMICS -A ONE SECTOR APPROACH

This paper deals with the problem of regional disequilibria. Its centr al concern is the derivation of an equilibrium and a disequilibrium gr owth model, based on the concept of location elasticities. The equilib rium model is based on the general idea that the production of a regio n, for a given sector, would be in equilibrium if every regional firm has located efficiently according to the regional location factor prof ile; the disequilibrium model is developed assuming an adaptation proc ess towards equilibrium. The model explains growth as the sum of an eq uilibrium and a disequilibrium component. The condition for a regional equilibrium growth pattern shows that adaptation is more difficult fo r regions with a small share of production because they have to follow a pattern of growth defined by regions with higher shares. The disequ ilibrium model also highlights how adaptation would be more difficult the more a sector is concentrated.