nep-geo New Economics Papers
on Economic Geography
Issue of 2009‒06‒10
seven papers chosen by
Vassilis Monastiriotis
London School of Economics

  2. Interest rates and convergence across Italian regions By Napolitanoi, Oreste; Montagnoli, Alberto; Dow, Sheila C.
  4. Cointegration Analysis of Regional House Prices in U.S. By Zohrabyan, Tatevik; Leatham, David; Bessler, David
  5. Regional Sources of Growth Acceleration in India By Ravindra H Dholakia
  6. Bank Integration and Local Credit Cycle:Evidence from Japan By Masami Imai; Seitaro Takarabe
  7. Which Factors Capitalize into House Prices? A Bayesian Averaging Approach By David Stadelmann

  1. By: Leah Platt Boustan (UCLA and NBER); Robert A. Margo (Boston University and NBER)
    Abstract: How does the spatial distribution of employment opportunities influence residential location? We revisit this classic question in urban economics by exploiting a natural experiment generated by the history of state capitals. Many state employees in capital cities work in centrally located government buildings that were constructed in the nineteenth century, while state workers elsewhere mirror the decentralization of the private sector. We compare the work and residential locations of state workers in capital and non-capital cities relative to other workers in their metropolitan areas. Our results suggest that assigning 1,000 jobs to the central city would attract approximately 250 working residents to the city. Evidence from other industries with historically-determined locations, including the postal service and defense contractors, corroborates our basic finding.
    Date: 2008–12
  2. By: Napolitanoi, Oreste; Montagnoli, Alberto; Dow, Sheila C.
    Abstract: The purpose of this paper is to investigate the evidence for economic convergence across Italian regions using trends in interest rate spreads and premia as indicators of regional credit conditions. Our results indicate the presence of persistent interest rate differentials, and thus an absence of convergence across the twenty political regions, but we observe a high degree of convergence within the four macroeconomic areas. On the other hand we find evidence of a strong level of homogeneity in credit conditions within each of the four macroeconomic regions.
    Keywords: Italy; convergence; panel data; unit root; interest rates
    Date: 2009–05
  3. By: Jeremy Atack (Department of Economics, Vanderbilt University); Fred Bateman (University of Georgia, Department of Economics); Michael Haines (Colgate University, Department of Economics); Robert A. Margo (Boston University, Department of Economics)
    Abstract: For generations of scholars and observers, the "transportation revolution," especially the railroad, has loomed large as a dominant factor in the settlement and development of the United States in the nineteenth century. There has, however, been considerable debate as to whether transportation improvements led economic development or simply followed. Using a newly developed GIS transportation database we examine this issue in the context of the American Midwest, focusing on two indicators of broader economic change, population density and the fraction of population living in urban areas. Our difference in differences estimates (supported by IV robustness checks) strongly suggest that the coming of the railroad had little or no impact upon population densities just as Albert Fishlow concluded some 40 years ago. BUT, our results also imply that the railroad was the "cause" of midwestern urbanization, accounting for more than half of the increase in the fraction of population living in urban areas during the 1850s.
    Date: 2009–01
  4. By: Zohrabyan, Tatevik; Leatham, David; Bessler, David
    Abstract: Using quarterly U.S. census division data for time period 1975-2006, this paper investigates the dynamic relationships among the house prices of nine divisions (regions): Pacific, Mountain, South Atlantic, Middle Atlantic, New England, East South Central, West South Central, West North Central, and East North Central. Johansenâs ML procedure is applied to shed light on the short-run and long-run components on the error correction model. Furthermore, a symmetric error-correction model is estimated followed by the contemporaneous causality structure that is provided by the directed acyclic graphs. The latter is used as an âinputâ for estimating the impulse response functions along with the forecast error variance decompositions. The results provide evidence of the presence of large number of cointegration relations between the regional house prices in the US. Moreover, in most cases, West North Central and New England appear to strongly and positively lead the house price changes in most other regions. The statement holds for Middle Atlantic which actually generates negative responses. On the other hand, house prices in East North Central and Mountain are highly influenced by changes in house prices of other regions. These results mostly hold for the dynamic period or from time horizon 0 (contemporaneous) to 35 (8.5 years). Furthermore, the real estate market in the US appears to be mainly led by regions that are influential in many other ways, such as financial, economic, etc.
    Keywords: Community/Rural/Urban Development, Financial Economics,
    Date: 2008
  5. By: Ravindra H Dholakia
    Abstract: Gujarat, West Bengal, Karnataka, Maharashtra, Kerala and Tamil Nadu were the major contributors to the growth acceleration in India after 1991-92. Although the Regional Disparity may increase temporarily, causality test provides support to the hypothesis about spread effects. The Regional growth targets assigned by the 11th Plan in India seem to rely on the spread effects of economic growth acceleration in the better off states to achieve its 9 percent growth target and reduce regional disparity in the long run. To strengthen spread effects, the domestic economy should be further integrated and interlinked with free flow of goods, services and factors of production.[IIMA WP no. 2009-03-06]
    Keywords: India; growth acceleration; regional growth; regional sources; regional disparity; contribution of state in growth acceleration; gross state domestic product
    Date: 2009
  6. By: Masami Imai (Department of Economics, Wesleyan University); Seitaro Takarabe
    Abstract: This paper investigates how the integration of local banking markets affects the credit and economic cycle of local economies by using both a data set on the branch network of nationwide city banks and a prefecture-level panel data set on the formation and collapse of the real estate bubble in Japan. The empirical results show that the presence of city banks does not seem to have lessened the effects of local financial shocks on local economies. On the contrary, we find evidence that nation-wide city banks aggressively transmitted financial shocks that originated from major cities to local peripheral economies. These results suggest a dark side of large nation-wide banks: they can be a source of financial and economic volatility when they elect to take concentrated risk and spread out the impacts of large financial shocks to peripheral economies.
    Date: 2009–06
  7. By: David Stadelmann
    Abstract: This paper investigates the robustness of 31 community speci?c explanatory variables for house prices in the Swiss metropolitan area of Zurich using Bayesian Model Averaging. The main variables which capitalize with a high posterior prob- ability are location speci?c real estate characteristics, municipal taxes and ex- penditures for culture, health and social services. Demographic as well as other socioeconomic controls seem to be of minor importance. The analysis suggests a minimal list of variables that may be included in any estimation for capitalization of community speci?c characteristics in the context of a metropolitan area in a highly developed country.
    Keywords: Capitalization; House Price Hedonic; Taxes; Model Uncertainity; Bayesian Model Averaging
    JEL: R21 C11 H40
    Date: 2009–05

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