nep-geo New Economics Papers
on Economic Geography
Issue of 2005‒01‒16
seven papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Place of Work and Place of Residence: Informal Firing Networks and Labor Market Outcomes By Patrick Bayer; Stephen Ross; Giorgio Topa
  2. Maquiladora Employment Dynamics in Chihuahua City, Mexico By Thomas M Fullerton Jr; Luis B Torres Ruiz
  3. Location Choice and Employment Decisions: A Comparison of German and Swedish Multinationals By Sascha Becker; Karolina Ekholm; Robert Jaeckle; Marc Andreas Muendler
  4. Spatial Analysis: Development of Descriptive and Normative Methods with Applications to Economic-Ecological Modelling By Anastasios Xepapadeas; William Brock
  5. Monetary Policy Shocks and the Role of House Prices Across European Countries By Massimo Giuliodori
  6. Housing Market Dynamics: On the Contribution of Income Shocks and Credit Constraints (Revised Version) By Ortalo-Magne, Francois; Rady, Sven
  7. EU Enlargement, Migration and the New Constitution By Hans-Werner Sinn

  1. By: Patrick Bayer; Stephen Ross; Giorgio Topa
    Abstract: We use a novel dataset and research design to empirically detect the effect of social interactions among neighbors on labor market outcomes. Specifically, using Census data that characterize residential and employment locations down to the city block, we examine whether individuals residing in the same block are more likely to work together than those in nearby but not identical blocks. We find significant evidence of social interactions: residing on the same versus nearby blocks increases the probability of working together by over 50 percent. We also provide evidence as to which types of matches between individuals result in greater levels of referrals. These findings are robust across various specifications intended to address concerns related to sorting and reverse causation. Further, our estimated match effects have a significant impact on a wide range of labor market outcomes more generally including employment and wages.
    JEL: J41 R14
    Date: 2005–01
  2. By: Thomas M Fullerton Jr (University of Texas at El Paso); Luis B Torres Ruiz (Banco de Mexico)
    Abstract: Greater economic integration between developing and higher income economies has caused increased 'north-south' business cycle linkages. This study applies a linear transfer function ARIMA approach to analyze regional maquiladora payroll dynamics in a non-border region of Mexico. Statistically significant responses occur as functions of variations in the exchange rate, real wages, foreign investment, and United States industrial activity. Simulation testing is also conducted as another means of empirical model verification.
    Keywords: Maquiladoras, International Business Cycle Transmission, Applied Econometrics
    JEL: O19
    Date: 2004–12–29
  3. By: Sascha Becker; Karolina Ekholm; Robert Jaeckle; Marc Andreas Muendler
    Abstract: Using data for German and Swedish multinational enterprises (MNEs), this paper assesses international employment patterns. It analyzes determinants of location choice and the degree of substitutability of labor across locations. Countries with highly skilled labor forces attract German MNEs, but we find no such evidence for Swedish MNEs. This is consistent with the hypothesis that German MNEs locate production stages intensive in high-skilled labor abroad. In MNEs from either country, affiliate employment tends to substitute for employment at the parent firm. On the margin, substitutability is the strongest with respect to affiliate employment in Western Europe. A one percent larger wage gap between Germany and locations in Central and Eastern Europe (CEE) is estimated to be associated with 900 fewer jobs in German parents and 5,000 more jobs in affiliates located in CEE. A one percent larger wage gap between Sweden and CEE is estimated to be associated with 140 fewer jobs in Swedish parents and 260 more jobs in affiliates located in CEE.
    Keywords: multinational enterprises, location choice, multinomial choice, labor demand, translog cost function
    JEL: F21 F23 J21 J23
    Date: 2005
  4. By: Anastasios Xepapadeas (University of Crete); William Brock (University of Wisconsin)
    Abstract: This paper adapts Turing analysis and applies it to dynamic bioeconomic problems where the interaction of coupled economic and ecological dynamics over space endogenously creates (or destroys) spatial heterogeneity. It also extends Turing analysis to standard recursive optimal control frameworks in economic analysis and applies it to dynamic bioeconomic problems where the interaction of coupled economic and ecological dynamics under optimal control over space creates a challenge to analytical tractability. We show how an appropriate formulation of the problem reduces analysis to a tractable extension of linearization methods applied to the spatial analog of the well known costate/state dynamics. We illustrate the usefulness of our methods on bioeconomic applications, but the methods have more general economic applications where spatial considerations are important. We believe that the extension of Turing analysis and the theory associated with dispersion relationship to recursive infinite horizon optimal control settings is new.
    Keywords: Spatial analysis, Economic-ecological modelling
    JEL: Q2 C6
    Date: 2004–12
  5. By: Massimo Giuliodori
    Abstract: This paper provides a discussion of the `housing market' channels of the monetarytransmission mechanism (MTM) and offers some evidence on institutional differences in the European housing and mortgage markets. Using a number of VAR models, estimated individually for nine European countries over the pre-EMU period, we find that house prices are significantly affected by monetary policy shocks. The relative role of these policy-induced fluctuations in house prices for private consumption is then investigated. We show that house prices may enhance the effects of monetary shocks on consumer spending in those economies where housing and mortgage markets are relatively more developed and competitive.
    Keywords: Monetary transmission; house prices; impulse responses.
    JEL: C32 E21 E52 R21
    Date: 2004–11
  6. By: Ortalo-Magne, Francois; Rady, Sven
    Abstract: We propose a life-cycle model of the housing market with a property ladder and a credit constraint. We focus on equilibria which replicate the facts that credit constraints delay some households' first home purchase and force other households to buy a home smaller than they would like. The model helps us identify a powerful driver of the housing market: the ability of young households to afford the down payment on a starter home, and in particular their income. The model also highlights a channel whereby changes in income may yield housing price overshooting, with prices of trade-up homes displaying the most volatility, and a positive correlation between housing prices and transactions. This channel relies on the capital gains or losses on starter homes incurred by credit-constrained owners. We provide empirical support for our arguments with evidence from both the U.K. and the U.S.
    JEL: R21 G21 G12 E32
    Date: 2005–01
  7. By: Hans-Werner Sinn
    Abstract: The paper deals with the effects of migration resulting from EU Eastern enlargement on the welfare states of Western Europe. Although migration is good in principle, as it yields gains from trade and specialization for all countries involved, it does so only if it meets with flexible labour markets and if it is not artificially induced by gifts from the welfare state. This is not the present state of affairs in Western Europe. In addition to measures that make labour markets more flexible, the introduction of delayed integration of working migrants and the home country principle for non-working migrants is a rational reaction of the state. The proposed new EU constitution which contains far-reaching rules for a European social union should be amended accordingly.
    Keywords: EU enlargement, migration, EU constitution, social union
    JEL: E20 F20 H00 J30 J60
    Date: 2004

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