Geoscience Reference
In-Depth Information
8
The Process of Regional Economic Growth:
A Case Study of Washington State
Richard S. Conway Jr
Abstract
Nearly 60 years ago, North and Tiebout engaged in a vigorous debate on the
nature of regional economic growth that is still relevant today. The discourse led
to the formulation of the economic base model, a simple but powerful means of
explaining, analyzing, and forecasting the process of regional economic growth.
The objective of this study is to explain how the Washington state economy
has grown and evolved over the past 50 years in light of the theory advanced by
North and Tiebout. Drawing upon Washington's long history of regional eco-
nomic modeling and analysis, the study addresses several questions, among
them: Are exports the key to regional economic growth? To what extent do
people follow jobs? Are the regional unemployment rate, wage rates, and
consumer prices determined in the regional or national market? What are the
causes of regional economic cycles?
This case study shows that the historical behavior of the Washington eco-
nomy is largely consistent with the economic base theory of regional growth.
The study presents a classical picture of an open regional economy operating in a
much larger arena: a trade-dependent economy with little, if any, control over its
unemployment rate, wages, and prices because of mobile factors of production.
8.1
Introduction
Nearly 60 years ago, North (
1955
,
1956
) and Tiebout (
1956a
,
b
) engaged in a
vigorous debate on the nature of regional economic growth, a discussion that is still
relevant today. Their remarkable interchange covered a wide range of topics:
definition of a region, open economy, stages of growth, economic base, compara-
tive advantage, specialization, footloose industries, residentiary sector, labor and
