THEORY OF ECONOMIC DEVELOPMENT

ECONOMIC BASE

An economic 'base' is necessary for metropolitan growth. While some analysis contend that a metropolis's economic base can by measured by the concentration of an industry, the true metric is much simpler: Whatever brings in outside money.The easy flow of fiscal resources has made the world vastly 'flatter' than any time in history.  As a result, it is not possible to have metropolitan economies based entirely on transfer payments.

In a world of globalized supply chains, and internationalized corporate ownership, the primary economic impact from increased economic activity is not the purchase of additional local inputs, or even through local taxation. The on-going competition for taxable economic activity between different locations has sparked a ‚race for the bottom‘, significantly reducing firms tax burdens.

The capacity of an industry to be the economic base for an industry depends on its wage outputs, with a strong preference for high-wage jobs. The size of a metropolitan area‘s secondary economy corresponds to the magnitude and number of value inflows. While a metropolitan economy can be supported by a large stock of low-magnitude flows, high-magnitude flows are strongly preferable, because of the impacts on the secondary economy.

SECONDARY CYCLE

Clearly, not all economic activity in a region consists of primary economic activity. Secondary economic occurrs when money from the primary economic activity is recirculated in the local economy.  Secondary economic activity can be defined as any economic activity that would not occurr without the flows of value provided by the economic base. Most notably retail, they also include most services, including public services and institutional services such as health and education made possible by tax dollars provided by the economic base.

As value flows from agent to agent, each agent takes a *cut* of the value, thus reducing the magnitude of the flow. A high-magnitude flow of value is extremely desirable because of it’s capacity to generate multiple chains of secondary value flows. Value continues to flow through a metropolitan economy until it leaks out to acquire goods and services that are either unavailable or overpriced within that economy. Thus, the more *complete* a metropolitan economy is, the greater the number of secondary cycles occurr within the economy.

JOBS ATTRACT HOUSEHOLDS

As an economic base grows, so does the demand for employees. In a growing economic region, the rate of economic growth exceeds the rate of natural increase, necessitating immigration. The demand for employees in excess of supply leads to rising wages, which then attracts households from other metropolitan regions. As the number of households rise, the vacancy rate of available housing (rented and owned) falls, and the rising value of property/rents stimulates new construction. (This relationship characterizes one of the virtuous cycles that helps power economic development in growing metropolitan regions).

Intro to Python Notes

Integrated window--IDLE. Type in, responds directly. There are a lot of things that python just does automatically, through automatic presets--simpler once you know it, but more of a learning curve. Python is case sensitive.

If you want to get decimals, you need to include at least one of the numbers as a non integers. 19.0/3 will return decimals, 19/3 will only return a integer--6. Standard order of operations. 19%3=1  % is the character for 'remainder'. Considered as 'division' in order of operations. ^ is not used for exponent--** is used instead.

Alt+P retypes the last command you exectuted--may 'scroll back' through multiple commands--not just last, but commands previous to that.
#/Sharp/Hashtag used for commenting.
Used for commenting code.  

Seems like variables can be any string. Will accept strings or numbers.
frog=6
frog='communism'

Allows and echo like:
frog*6 gets communismcommunismcommunismcommunismcommunismcommunism
May set mathematical operations as variables:
frog=2*9
frog=18


Saving, must add the extension .py. If you miss it, not critical--will have to open IDLE and then open the file rather than just being able to double-click it.

Create new is out of the main python terminal, which allows you to execute multiple line scripts. In the main editor it runs each line as you type it in.

Variable types = string, number, tuple, list, dictionary...
List needs end-brackets [], separated by commas.

>>> print "My number is", MyNum
My number is 1
#automatically adds the space before a variable?

"append" adds a name to a list.
>>> names.append('catherine')

Ideal Design

The ideal spatial distribution of trip ends would would result in in an arrangement where the trip-ends for the most frequent trips were in closest proximity. In reality, the distribution of trips ends is more arbitrary.

Ring Residential

The historic 'ring' structure of industrial and manufacturing-centric urbanization, with residential around an employment core is caused by the need for transportation access. The core forms around essential transportation infrastructure--ports, rivers, railways, highway interchanges. Access to transportation is an economic necessity, and are capable of 'outbidding' competing land uses.  At the edge, 'outbid' residential uses locate. Because residential uses require more land area per person than industrial uses, they eventually come to 'ring' the industrial uses, impairing their expansion potential.

Urban Land Supply

The rate at which urban land is being made available for development exceeds the demand for new urban land. This is indicated by the prevalence of fully depreciated vacant buildings and vacant lots present in the urbanized area.

Intensification

Not all urban uses are amenable to more intensive use—for some uses, it is not cost-effective. Multi-story construction is significantly more expensive than single-story construction. Thus, limited developable area acts as a constraint on economic growth.

MODEL DEVELOPMENT

Model structure--the relationship between model elements.

Calibration--using data-sets to ensure that model matches. Differences between these two constitutes specification error.

Validation --Tests to measure  models predictive capacity. Requires a second data-set.

Model Development Principles
•    Concentrate on transparency. Models should be communicable. This necessitates the development of nested modeling.
•    Limit interconnectivity between model elements to the minimum possible.
•    Model structure should be transparent. Relationships between model elements shoul be clear, and should (when possible) correspond to participants pre-existing mental categories.
•    Equations available, data-sources documented. When possible, a model should be packaged to contain it's own documentation.

SYSTEMS DYNAMICS MODELING

The theory and process of system dynamics modeling requires specialized knowledge and mind-set which is time-consuming to develop.

With the notable exception major metropolitan areas, and certain innovative MPO's, most regions no longer contain the problem solving capacity 'in-house'. Existing in-house capacity is primarily institutionalized in a 'system maintenance' role. The capacity to solve problems has been outsourced to consultants.  Consultants maintain the capacity to offer on-demand expertise and solutions based on comparable experience. Also maintain specialized of occaisonally needed technical know-how. Effecively, act as  intermediaries between decision makers and technical information and interpreters of that information.

System Dynamics does represent a 'new scientific revolution', in the sense that it is replacing the linear and atomistic representations of the world. However, the educational project should remain separate from system dynamic consulting. The structure of scientific revolutions dictates that the theory will be more widely adopted as more practical applications for the theory are found and demonstrated.

Causal Flow of Road Building

Present crisis may provide the mechanism to overcome political and institutional difficulties…

….Constraints on Federal budgetàreduced federal subsidies for road-buildingàreduced state road building budgets

….Rising gas pricesà Reduced commuting distancesàIncreased demand for ‘close in’ landàRising urbanized land valuesàRising densitiesàRising alternative mode shareàfalling automobile dependencyàre-shaping of transportation infrastructure

=reduced urban sprawl and constrained traffic congestion*