An examination of regional interaction and super-regions in Britain: An error correction model approach

Gray, David (2005) An examination of regional interaction and super-regions in Britain: An error correction model approach. Regional Studies, 39 (5). pp. 619-632. ISSN 1360-0591

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Full text URL: http://dx.doi.org/10.1080/00343400500151889

Abstract

This paper examines spill-over effects among regions. Estimating error correction models of British rates of unemployment and conducting Granger-causality tests, it is found that, on a short-run basis, the West Midlands is a leading territory within a closely knit group of surrounding regions. The paper draws a distinction between a core and a leading region, suggesting the core region, the South East, is a follower, responding to, and magnifying, economic fluctuations. The policy implications are that current regional delineations may not be consistent with the demands of economic coherence at the national level and so is not optimal for the delivery of decentralized spatial economic policy. Indeed, as economic engineering in the high unemployment periphery has consequences for more prosperous areas, it may be better not to allow local administrators too much autonomy as the benefits of a better economic focus may be out-weighed by destabilizing tendencies that decentralization may impose on the whole system. This problem has consequences for, and may be compounded by, policy initiatives at the European level

Item Type:Article
Additional Information:This paper examines spill-over effects among regions. Estimating error correction models of British rates of unemployment and conducting Granger-causality tests, it is found that, on a short-run basis, the West Midlands is a leading territory within a closely knit group of surrounding regions. The paper draws a distinction between a core and a leading region, suggesting the core region, the South East, is a follower, responding to, and magnifying, economic fluctuations. The policy implications are that current regional delineations may not be consistent with the demands of economic coherence at the national level and so is not optimal for the delivery of decentralized spatial economic policy. Indeed, as economic engineering in the high unemployment periphery has consequences for more prosperous areas, it may be better not to allow local administrators too much autonomy as the benefits of a better economic focus may be out-weighed by destabilizing tendencies that decentralization may impose on the whole system. This problem has consequences for, and may be compounded by, policy initiatives at the European level
Keywords:Regionalism
Subjects:L Social studies > L113 Economic Policy
Divisions:College of Social Science > Lincoln Business School
ID Code:551
Deposited By: Bev Jones
Deposited On:05 Sep 2007
Last Modified:18 Jul 2011 16:12

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