This paper proposes a dynamic two-region model with human capital accumulation. This economic system is assumed to produce two commodities - one in each region. The only university in the economy which carries out higher education (=teaching) is located in region 1. The model describes the...

The continuos inflow of new products is a fundamental condition for a well-functioning market economy. It has been argued that new products are the outcome of a process which is based upon the principle "novelty by combination". This characterization applies well to the type of product...