2005/06/29 by Tanya Araújo, Tanya Araujo, Araujo, Tanya +2
Economics, Econometrics and Finance · Physics and Astronomy · #Adaptation and Self-Organizing Systems (nlin.AO) #Economic Growth and Productivity #FOS: Physical sciences #Fiscal Policy and Economic Growth #Regional Economics and Spatial Analysis #nlin.AO
paper · pdf · doi:10.48550/arxiv.nlin/0506062
12 pages and 3 figures
openalex publication_date 2005/06/29 · arxiv created 2005/07/01 · arxiv updated 2009/12/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
Endogenous, ideas-led, growth theory and agent based modelling with neighbourhood effects literature are crossed. In an economic overlapping generations framework, it is shown how social interactions and neighbourhood effects are of vital importance in the endogenous determination of the long run number of skilled workers and therefore of the growth prospects of an economy. Neighbourhood effects interact with the initial distribution of educated agents across space and play a key role in the long run stabilisation of the number of educated individuals. Our model implies a tendency towards segregation, with a possibly positive influence on growth, if team effects operate. The long run growth rate is also shown to depend on the rate of time preference. Initial circumstances are of vital importance for long run outcomes. A poor initial education endowment will imply a long run reduced number of skilled workers and a mediocre growth rate, so there no economic convergence tendency. On the contrary, poor societies will grow less, or will even fall into a poverty trap, and will diverge continuously from richer ones.