Tag: R11

A NOTE ON OPTIMAL INCOME REDISTRIBUTION IN A CREATIVE REGION

Amitrajeet A. BATABYAL

Department of Economics, Rochester Institute of Technology, 92 Lomb Memorial Drive, Rochester, NY 14623-5604, USA.

aabgsh@rit.edu

Abstract

We study optimal income redistribution in a region that is creative in the sense of Richard Florida and thereby extend aspects of the recent analysis in Batabyal and Beladi (2017). Using the terminology of these researchers, members of the creative class are either artists or engineers. This bipartite grouping stems from the manner in which creative capital is acquired by the artists and the engineers. Specifically, we show that when the savings rates of the artists and the engineers comprising the creative class satisfy a particular inequality, it is possible for a regional authority (RA) to uniquely redistribute income between these two groups in a way that achieves the so called “golden rule” stock of physical capital.

Keywords: Creative Capital, Creative Class, Golden Rule, Income Redistribution, Region

JEL classification: R11, D31

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OUTPUT, GROWTH, AND CONVERGENCE IN A GREATIVE REGION: AN ANALYSIS OF SOME MEASUREMENT ISSUES

Amitrajeet A. BATABYAL

Department of Economics, Rochester Institute of Technology, 92 Lomb Memorial Drive, Rochester, NY 14623-5604, USA.

aabgsh@rit.edu

Abstract

We study some measurement issues that arise when analyzing the long run behavior of the  jth creative region’s time t log output per creative class member (yj(t)) when this region is part of an aggregate economy of j=1,…N creative regions. We focus first (second) on absolute (relative) convergence. In the absolute (relative) convergence case, the N creative regions are similar (dissimilar) in that they all have the same (different) balanced growth path (BGP) level of log output per creative class member denoted by yBGP(yjBGP) In the absolute convergence case, we analyze how to estimate the speed of convergence parameter (σ) and then discuss the relationship between the variance of yj(t) and that of yj(0) In the relative convergence case, we study the error associated with estimating σ using the methodology of the absolute convergence case. Finally, suppose yjBGP= a + bXj where Xj is an explanatory variable such as creative capital and a and b are positive constants. Here, we study how to estimate b from our knowledge of the coefficients of a related cross-region growth regression.

Keywords: Convergence, Creative Capital, Economic Growth, Measurement, Output

JEL classification: R11, C18

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REGIONAL STRATEGIES FOR DEALING WITH STRUCTURAL CHANGE

Eleonora CUTRINI

Associate Professor, Department of Law, University of Macerata

eleonora.cutrini@unimc.it

Enzo VALENTINI

Research Fellow,Department of Political Sciences, Communication and International Relations, University of Macerata

enzo.valentini@unimc.it

Abstract

In recent decades, the low economic performance of European countries has been mainly responsible for the emergence of an economic policy increasingly intended to strengthen the innovative and technology capacity of regions. In particular, the European periphery is lagging behind in the transition to a knowledge driven and eventually service-oriented economy. In a general context of de-industrialization and transition to service economy, and bearing in mind the policy debate at the EU level, the aim of this paper is to analyze the factors driving knowledge-intensive service specialization at the regional level in Italy. Our main research questions here can be summarized as follows: What determines the transition to Services and the specialization in Knowledge-Intensive Services (KIS) in Italy? What are the structural characteristics that may explain the regional variation of employment share in high-knowledge services? Using data on Italian regions over the period 1995-2014 (and spatial panel models as a methodology), the analysis carried out in the paper suggests some considerations: the “mere” (but needed) transition to service activities can be positively associated with R&D Personnel, Tertiary Education, University Attractiveness, Tourism and efficient infrastructure (Railroad). But the transition to Knowledge Intensive Services, supposed to pay higher wages, may deserve a more appropriate and focused public intervention, in view of the fact that it seems to be mainly associated with Public R&D, Tertiary Education and University Attractiveness.

Keywords: Structural Change, Specialization, Spatial Panels, Regional Economy

JEL classification: I25, O32, R11, R12

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