E-Prints Complutense

Abstract

Regional and national incomes are determined by spatial and non spatial phenomena. Relative elasticities in Spain and U.S.A. for income explanatory variables, which were derivated from space models estimates, are 35 y 65%, respectively. External spatial economies, locational inertia of investment and urban expenditure multiplier -all of them typical spatial variables- are all concepts explaining the way space cooperates to income generation. Non spatial economic analysis therefore does not pay attention to phenomena which explain about a third of the produced national wealth. Regional income imbalances have not disappeared after decades or even centuries of economic development. Although they have indeed decreased dramatically, this reduction stopped around 1960 in the U.S.A. and 1980 in Spain. Since then regional per capita income imbalances have remained almost constant, ranging from 60 to 75 % between poor and rich regions. Interregional technological transfers, internal economies of scale, the urban expenditure multiplier, and decreasing external spatial economies explain the interregional “catching-up”. External spatial economies, locational inertia of investment and the end of regional labour migration are the reasons explaining the present steadiness in spatial imbalances.