Policy-Oriented Models of Interregional Development

Abstract

<p>In this dissertation government influence is an endogenous component of interregional development. The purpose of the study is to determine some of the implications of economic and/or population goals, in terms of the types of government actions that will be required to meet these goals, and in turn, the effect that these actions will have on regional income and population levels over time. These planning issues are treated as optimal control problems, which are solved using Pontryagin's Maximum Principle. This study represents one of the first applications of Pontryagin's Maximum Principle to geographic systems, and was developed independent of other related studies.</p> <p>Four models are analyzed. All are simple, and serve as precursors of more comprehensive models. The first deals with the magnitude of government intervention when economic projections do not concur with established goals. The second model focuses specifically on per capita regional government spending as a policy instrument. The third model emphasizes the feedback between production levels and migration. The fourth is particularly sensitive to regional disparity, as well as to regional growth.</p> <p>Results of the models indicate that in planned regional economies, levels of per capita income and population will probably exhibit steady trends, without sharp upturns or downturns in either economic or population growth. This is true even when there are only constrains on the income and population levels at the end of the planning interval, but none on the trajectories during that interval. Underlying this scenario of steady trends, however, is the possibility of extremely drastic fiscal, monetary and immigration policies, which are required to maintain such trends. The severity of these policies will depend on the regions' economic and population goals, the magnitude of these goals relative to those of other regions, the propensity of migrants to move to the more prosperous regions, and the labour intensiveness of regions' economies.</p>