Spatial Economics --  Growth Poles and Theories of Growth

I.  Growth Poles
   A.  Spread and Backwash effects
       1.  Spread Effects:  try to establish an impetus for development in a particular area
             a.  North Carolina:   rural areas/low income nodes become core areas of development and effects  will  hopefully spread outwards
           b.  South America--similar goals as North Carolina
         2.  Backwash Effects:  Forced Concentration  of resources in a particular area; does not spread out,  just consolidates within that area
           --example: Arkansas pulls all labor from countryside which has a negative effect on the rural economy
   B.  Circular and Cumulative Causation
       1.  Dynamic View: cycle of positive benefits or negative effects
         2.  Example: St. Louis, depended on the  Mississippi River (transportation) when transportation technology  improved, St. Louis' economy spiraled down
II.  Growth Theories
   A.  Rostow's Stages of Growth--Demographic Transition Model applied to Economics
       1.  Preconditions for Growth:
           --political environment, raw materials
       2.  Takeoff
           --forces come together, cumulative causation (switch in sectoral distribution)
       3.  Drive to Maturity
           --value of the finished product/manufacturing
       4.  Age of Mass Consumption
           --FORD motor company--create your own market: massive group of individuals willing to buy your product
       5.  Post-Industrial
           --services and technology, "The Knowledge Economy"
   B.  Entrepreneurship and Schumpeter
       1.  Long waves of development--i.e. Automobile Age or Computer Age, both fuel long expansive growth
       2.  Entrepreneuer: creative individual willing to accept risk
       3.  High technology led development
             --i.e. Japan's technology policy:  Individual/human capital based--promote an environment where people are  willing to take risks
   C.  New Growth Theory/Old Growth Theory
       1.  Old Growth Theory: Neo-Classical, focus on equilibrium, all markets are in balance
             a.  as a worker, you go to  place with highest wage, this movement takes place until an equilibrium in  pay rate is achieved        
           b.  capital flows also move towards equilibrium and regional disparities should disappear
           c.  we don't see convergence--Old Growth Theory does not explain growth
     2.  New Growth Theory: Areas that are ahead will stay  ahead, areas that are behind will stay behind, a locked in system
III.  Policy Issues
     A.  Domestic vs. International Development:  trade-offs--should  U.S. send money overseas when poverty exists  within this country?
     B.  Growth vs. Equity: Equitable distribution = fair distribution, if growth is concentrated in  particular place, it is not eqitable
     C. Growth vs. Equity vs. the Environment: placing value on  the things you have in your country and    incorporating  the environment into the equation.  i.e. What are the long term effects  of deforestation of the  Rainforest?
IV.  Movie: China/Hong Kong: Transition from rural to urban economy