DIRECTIONS FOR DIVERSIFICATION WITH AN APPLICATION TO SASKATCHEWAN*

ABSTRACT. Traditional models of regional diversification do not capture the trade-off between stability and living standards. In this paper, we characterize regions as open activity models subjected to both productivity and price shocks. We then partially rank small diversification policies by the direction in which they point away from the current industrial structure in mean-variance space. Some general patterns emerge. In particular, diversification for regional self-sufficiency and away from regional comparative advantage may be undesirable.     

The assumption of equilibrium in the analysis of migration and interregional differences: a review of some recent research

"This paper questions the plausibility of the assumption of interregional equilibrium in recent research into migration and the valuation of amenities in the United States. It is shown that it is difficult to develop a satisfactory explanation for continuing net migration which is compatible with the equilibrium assumption, and that recent relevant research generally fails to support the idea that the U.S. economy is in equilibrium. The association of higher rent levels with in-migration is explained as a short-run phenomenon. If the spatial economy is in disequilibrium, then the valuations of amenities assuming equilibrium will be biased, being probably too low in areas of net in-migration and too high in areas of net out-migration."