A neoclassical model of interregional economic growth

Interregional economic growth is characterized by free trade, capital movements and labour migration. An interregional equilibrium and a steady state are likely to exist, and if a disturbance occurs, there might be a tendency back to equilibrium. Output and income grow at the same rate in all regions, although the regions differ in technology, propensity to save and natural growth of labour; these factors also determine the speed of expansion. Yet if the natural growth of labour is too fast (too slow), then capital and labour tend to a single region.