11.481J / 1.284J / ESD.192J
Analyzing and Accounting for Regional Economic Change

Prerequisites: 
14.03, 14.04

The practice of regional development utilizes economic theory to explain how (primarily) economic forces lead to and perpetuate spatial variation across geographic space. Regional theory seeks to explain not only why activities vary across location, but it also provides the motive force behind changes over time.  For planners “regional” represents a spatial unit of analysis like city, metropolitan, or rural area. Regional methods enable a systems perspective of how the spatial “economy” works in isolation (say a single regional economy) and as a system of systems (for example, regions in relations to other regions).

The foundational understanding of a regional approach draws from theories developed in the field of geography. Geography helps us understand core concepts including space, place, scale and time. Geographic theory helps us to understand and make apparent the meaning of “difference” (including aspects such as race and gender) in terms structures, identity and human agency (human volition) all of which vary over space and time.

Leveraging the merits of geographical theory, this class focuses on alternative ways to conceptualize and understand issues of regional growth, restructuring, innovation, knowledge, learning, and accounting and measurements in both industrialized and emerging countries. We will explore a wide range of perspectives including but not limited to neoclassical, political-economy and heterodox concepts to explain regional growth, factor mobility, agglomeration, networks, dispersion, core-periphery, path dependence, technological lock-in, distance, absolute and relative location, restructuring, and globalization. For each concept, we cover the basic conceptual framework, main assumptions, and arguments for and against the use by scholars and practitioners. We give special emphasis to recent transformations in regional economies throughout the world and to the implications these changes have for the theories and research methods used in spatial economic analyses. At the same time we attempt to ground our understanding of regional processes in the lived experience of the individual.

We examine and evaluate critically the accounting frameworks used to measure regional economic growth and review multipliers, backward and forward linkages, supply chains, and other measures. We discuss how these concepts can be used to assess employment and environmental impacts and infrastructure investments, accounting for measurement problems, such as the underground economy and green accounting. We review price indices, employment and industrial location measures, and shift-share analyses, discussing both U.S. and foreign applications of the theories, accounts, and techniques.