AAE 520, Community Economics
Part A: A vital element of community economic development policy centers on how we think about business climate. Over time, as the economy and our understanding of the economic growth and development process has changed, our thinking about what constitutes a positive business climate has changed. What are some competing views around business climate and what are the theoretical justifications for those competing views? Think in terms of economic growth theory as well as firm location theory. Use those different theoretical perspectives to explain (defend?) the competing views of business climate.
Part B: What, in your opinion, is a positive business climate? Identify and describe half a dozen (+/-) specific strategies that communities can put in place to foster a more pro-active positive business climate.
Part A: Economic historians have understood that innovation is key to economic growth and development for many years, but a consistent theory that explains why innovation occurs was not available until the introduction of endogenous growth theory: profit motivation encourages firms to invest in research and development to capture short-term monopoly rents. But firms do not operate in a vacuum and are directly and indirectly influenced by the community/region in which they are located. For example, are they part of a dynamic regional economic cluster. Using the Rural Innovation Report (linked here and also available in the course announcement were this exam is posted in Canvas) as a point of reference, how “innovative” is the Wisconsin economy? What does Wisconsin “have going for it” and/or “going against it"? (Wisconsin in this context is a “typical” U.S. state.)
Part B: Entrepreneurship is fundamental to the innovative process. Why?
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