G _ Myrdal. Ec on omi c Theory a ,n d_V nder de vef oped R eg' ion s. (19 57 ) - . CHAPTER 3 THE DRIFT TOWARDS REGIONAL ECONOMIC INEQUALITIES IN A COUNTRY i '. "'". ". A Simple Illust rati on I have suggested that the principle of interlocking, circular, / inter-dependence within a process of cumulative causation has validity over the entire field of social relations. It should be the main hypothesis when studying economic under-development a nd ./ Suppose that in a community an accidental change occurs which is not immediately cancelled out in the stream of events: for example, that a factory, where a large part of the population gets its livelihood, bums down and that it becomes clear that it would not pay to rebuild it, at least not in that locality: The immediate effect ofthi primary change is that the firm. owning it goes out of business and its workers become unemployed. This will decrease I incomes and demand. I , In its turn the decreased demand will lower incomes an d cause unemployment in all sorts of other businesses in the community . which sold to, or served, the firm. and it s employees. A process of circular causation has so been started with effects which cumulate in the fashion of the "vicious circle". I f there are no other exogenous changes, the ~1nmunity will be less tempting for outside businesses andrwcrkers who had con- . templated moving in, As the process gathers momentum, busl- .nesses established in the community and workers living there will increasingly find reasons for moving out in order to seek better markets somewhere else, I f they do, this will again decrease incomes and- demand. It will usually also change the age structure of the' local population irl an ~nfavourable direction. To throw light on the mechanism of this cumulative causal 'sequence, let us watch the behaviour of one single factor and let us 23 ~ , ; .1 .1 I I j I i j ) I , ! Cr .... d with nitroPDF"professi anal d ow nl oad thefree trial online at nttrepdf.ccmzprcfeeaonal
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G. Myrdal, Economic Theory and Underdeveloped Regions
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8/3/2019 G. Myrdal, Economic Theory and Underdeveloped Regions