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Superstar cities and left-behind places: disruptive innovation, labor demand, and interregional inequality

Kemeny, Thomas and Storper, Michael (2020) Superstar cities and left-behind places: disruptive innovation, labor demand, and interregional inequality. Working Paper (41). International Inequalities Institute, London School of Economics and Political Science, London, UK.

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Abstract

After a long period of convergence, around 1980, inter-place gaps in economic well-being in the United States began to increase. This rising inequality offers a rich terrain to explore causality in regional economics and development theory. This paper presents new, long-run evidence on interregional inequality that highlights the need to situate the current moment in a context of episodic alternations between convergence and divergence. In light of this evidence, the paper revisits the theoretical literature, finding gaps in existing supply- and demand-side models. A demand-led perspective can be strengthened by integrating a primary role for disruptive technological change. We posit a theory of alternating waves, where major technology shocks initially concentrate, and eventually deconcentrate, demand for skilled workers performing complementary tasks. Labor supply responds to these centripetal and centrifugal forces. These reversals yield the observed patterns of rising and falling interregional inequality. We trace out the implications of this theory in both academic and policy terms.

Item Type: Monograph (Working Paper)
Official URL: http://www.lse.ac.uk/International-Inequalities
Additional Information: © 2020 The Authors
Divisions: Geography & Environment
International Inequalities Institute
Subjects: H Social Sciences > HN Social history and conditions. Social problems. Social reform
JEL classification: R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, and Changes
R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R12 - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O33 - Technological Change: Choices and Consequences; Diffusion Processes
N - Economic History > N9 - Regional and Urban History > N90 - General, International, or Comparative
Date Deposited: 06 Feb 2020 15:09
Last Modified: 27 Jun 2020 23:18
URI: http://eprints.lse.ac.uk/id/eprint/103312

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