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Why would it be difficult to use a simple two-sector
l (economic base model) to capture the
interdependencies in a large metropolitan

(you can refer to the following Major Issues in this model to
answer this

• Does not imply an equilibrium growth rate (no negative
• No information about regional convergence processes (relative
• Unable to define the determinants of growth (exogenously
• Nonspatial → downward bias on multiplier
• Region is a uniform space vs rest of the economy (no
interdependence between regions) • High level of activities
aggregation (two sector)
• Ignores capacity constraints
• Assumes perfect elasticity of supply for inputs
• Residentiary industries have important role in allowing the base
to expand)