Cumulative Causation Model

A cumulative causation model means that a change in one factor causes a change in another, and subsequent changes in turn reinforce the change in the previous factor, leading to the evolution process along the original direction. Market forces generally tend to reinforce rather than weaken regional imbalances. If a region grows faster than another due to its initial advantages, it will grow faster in later years by virtue of its existing advantages. In the process of economic cycle accumulation, the cumulative effect has two opposite effects, namely reflux effect and diffusion effect. The former refers to the flow of capital and labor from backward areas to developed areas, resulting in the lack of factors in backward areas and slower development. The latter refers to the flow of capital and labor force from developed areas to backward areas to promote the development of backward areas.

Edited and translated by Zhang Yifei