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A Two-Sector Model of Creative Capital Driven Regional Economic Growth
Department of Economics, Rochester Institute of Technology, 92 Lomb Memorial Drive, Rochester, 14623-5604, NY, United States.
KTH, School of Architecture and the Built Environment (ABE). Tinbergen Institute, Amsterdam, Netherlands ; A. Mickiewicz University, Poznan, Poland.ORCID iD: 0000-0002-4068-8132
2018 (English)In: Journal of Quantitative Economics, ISSN 0971-1554, Vol. 16, no 3, p. 831-840Article in journal (Refereed) Published
Abstract [en]

We study aspects of economic growth in a region that is creative in the sense of Richard Florida. We model creativity by supposing that the region under study has two sectors. The first sector uses physical capital {K(t) } and trained workers {A(t) W(t) } to produce creative capital {R(t) }. The second sector uses physical and creative capital to produce a final consumption good {Q(t) }. In this setting, we accomplish four tasks. First, we derive the equations of motion for physical capital per trained worker (k) and creative capital per trained worker (r). Second, we find combinations of k and r for which k˙ = r˙ = 0. Third, we investigate whether the economy of our creative region has a balanced growth path (BGP). Finally, assuming that our region is initially on a BGP, we study the impact of a permanent increase in the savings rate (s) on the trajectory of output per worker.

Place, publisher, year, edition, pages
Springer Nature , 2018. Vol. 16, no 3, p. 831-840
Keywords [en]
Balanced growth path, Consumption good, Creative capital, Creative region, Economic growth
National Category
Economics
Identifiers
URN: urn:nbn:se:kth:diva-302064DOI: 10.1007/s40953-017-0100-9Scopus ID: 2-s2.0-85105724002OAI: oai:DiVA.org:kth-302064DiVA, id: diva2:1597941
Note

QC 20210928

Available from: 2021-09-28 Created: 2021-09-28 Last updated: 2022-11-30Bibliographically approved

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Nijkamp, Peter

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CiteExportLink to record
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Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
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  • Other style
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Language
  • de-DE
  • en-GB
  • en-US
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  • nn-NO
  • nn-NB
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Output format
  • html
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  • asciidoc
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