The role of equilibrium and disequilibrium in modeling regional growth and decline: a critical reassessment

ABSTRACT. The assumption of interregional equilibrium in migration research has recently been attacked. At issue is the motivation for on-going migration if rents and wags accurately compensate for spatial amenity variations; but if rents and wages fail to accurately compensate potential migrants, then amenity valuations must be flawed. We here show that arguments supporting substantial disequilibrium in the US. economy are unconvincing. The substantive issues are then clarified by a model which allows for both equilibrium and disequilibrium migration. We conclude that intertemporally systematic migration stems predominantly from equilibrium forces.