nep-geo New Economics Papers
on Economic Geography
Issue of 2012‒04‒17
ten papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. A Regional Model of Endogenous Growth with Creative Destruction By Steven Bond-Smith
  2. Well-Being in Germany: GDP and Unemployment Still Matter By Johannes Vatter
  4. Robust Test for Spatial Error Model:Considering Changes of Spatial Layouts and Distribution Misspecification By Guo, Penghui; Liu, Lihu
  5. Local average neighborhood effects from moving to opportunity By Dionissi Aliprantis; Francisca G.-C. Richter
  6. Regional Disparities in Poverty and Education in India By Sivakumar, Marimuthu; Vijay, M
  7. Neither here nor there: regionally targeted social policy or socially targeted regional policy? the first four years of Lula’s administration By Azzoni, C. R.; Guilhoto, J. J. M.; Haddad, E. A; Hewings, G. J. D.; Laes, M. A.; Moreira, G.
  8. Understanding the long-run decline in interstate migration By Greg Kaplan; Sam Schulhofer-Wohl
  9. Regional Disparity in Health and Health Care in China By Hong Wang; Licheng Zhang; Heng-fu Zou
  10. Economic Impact of the redevelopment of the Hartford Civic Center By Kathryn Parr; William Waite

  1. By: Steven Bond-Smith (University of Waikato)
    Abstract: We examine endogenous growth through vertical innovations in a two region model with partial regional and varietal knowledge spillovers. This paper extends the growth literature by adding a regional endogenous growth model with improvements in product quality, instead of a product variety engine for growth, where we account for partial knowledge spillovers in R&D. Starting with the quality ladders endogenous growth model we add traditional goods production by unskilled workers, location as a factor in R&D spillovers, migration of knowledge workers and vary the freeness of trade. Production of each manufactured variety is contestable through vertical innovation based on available knowledge and as a result, firms choose a location to maximise the productivity of R&D, maintain their niche monopoly and minimise transport costs. With contestability, knowledge spillovers provide for additional growth and the partial nature of spillovers causes an additional clustering effect encouraging agglomeration. Growth is highest when there is full agglomeration in one location, as knowledge spillovers are greater with manufacturing concentration. Agglomerated locations are reliant on local inter-varietal knowledge spillovers for growth while peripheral locations rely on trade and regional knowledge spillovers. In the long run, locations experience equal growth rates. If a location becomes agglomerated, it has higher long-run wages and higher growth rates during the transition to the long run. The model offers policy implications for lagging economies to improve inter-regional knowledge spillovers while agglomerated economies should be more concerned with business interaction within the region. Policies which reduce barriers to migration will increase long run growth rates by accelerating the transition to agglomeration.
    Keywords: endogenous growth; new economic geography; innovation; knowledge spillovers; agglomeration; quality ladders; creative destruction
    JEL: O41 R10
    Date: 2012–04–07
  2. By: Johannes Vatter
    Abstract: This paper examines regional differences in subjective well-being (SWB) in Germany. Inferential statistics indicate a diminishing but still significant gap between East and West Germany, but also differing levels of SWB within both parts. The observed regional pattern of life satisfaction reflects macroeconomic fundamentals, where labor market conditions play a dominant role. Differing levels of GDP and economic growth have contributed rather indirectly to regional well-being such that the years since the German reunification can be considered as a period of joyless growth. Approximately half of the "satisfaction gap" between East and West Germany can be attributed to differing macroeconomic conditions. Moreover, we argue that it is advisable for governments to collect more data on aspects that presumably influence the well-being of society. For example, it is highly probable that reliable data on regional income inequality would lead to severalimportant and influential studies. This, in turn, can help to design indicators for those characteristics which are known for affecting SWB. In total, we do not perceive any fundamental caveat for using data on SWB in order to measure welfare directly, at least within culturally and linguistically homogenous regions. To reduce statistical uncertainty, however, it would be helpful to include subjective information of this kind into larger cross-sectional surveys such as common census data.
    Keywords: social welfare, subjective well-being, unemployment, economic growth
    JEL: R10 I31
    Date: 2012
  3. By: MORETTO, A. C.; GUILHOTO, J. J. M.
    Abstract: The aim of this article is to analyse the intersectoral and interregional relations and to compare the produtive structure of the principal pole-regions in the economy of Parana, Brazil. To reach this it was used an interregional input-output table for the year of 1995 in which the state of Parana was dividid in four pole-reions: Curitiba, Ponta Grossa, Londrina and Cascavel. The main results show that the regional pole-regions of Curitiba and Londrina have a more complex productive structure. The sector of Pulp, Paper and Printing shows to be a key-sector for the Parana State economy and for the pole-regions of Curitiba and Ponta Grossa. Also the sectors of Non-Metallic Minerals and Transport Equipment were key-sectors for Curitiba. The Textile Industry had a fundamental role in the pole-region of Londrina and in the Parana State as a whole. The field of influence approach reveals that the main links are determined by the sectors directly connected to the pole-regions of Curitiba and Ponta Grossa.
    Keywords: Economic analyse; intersectoral relation and regional economy
    JEL: P25 R12
    Date: 2011–09–22
  4. By: Guo, Penghui; Liu, Lihu
    Abstract: This paper suggests a robust LM (Lagrange Multiplier) test for spatial error model which not only reduces the influence of spatial lag dependence immensely, but also presents robust to changes of spatial layouts and distribution misspecification. Monte Carlo simulation results imply that existing LM tests have serious size and power distortion with the presence of spatial lag dependence, group interaction or non-normal distribution, but the robust LM test of this paper shows well performance.
    Keywords: LM test; Spatial Layouts; Distribution Misspecification; Robustness
    JEL: C1
    Date: 2011–11
  5. By: Dionissi Aliprantis; Francisca G.-C. Richter
    Abstract: This paper estimates Local Average Treatment Effects (LATEs) of neighborhood quality from the Moving to Opportunity (MTO) housing mobility experiment in a generalized model with multiple treatment levels. We propose a new approach to identifying parameters that exploits the identification of unobservables in the multi-level model. The variation in neighborhood quality induced by MTO only allows us to identify LATEs of moving from the first to the second decile of the national distribution of quality, but in other applications the approach may allow for the estimation of Marginal Treatment Effects. Estimated LATEs on employment, labor force participation rates, earnings, income, welfare receipt, and body mass index are consistent with standard theories of neighborhood externalities.
    Keywords: Housing policy ; Econometric models ; Poverty
    Date: 2012
  6. By: Sivakumar, Marimuthu; Vijay, M
    Abstract: India is a witness of regional disparities in many sphere of socio- economic development. On one side, world’s majority of new billionaires are in India and on the another side, India has majority of poor people. Like that, in development, the States like Kerala, Tamil Nadu, Punjab, and Gujrat are in the forefront and BIMURAO (Bihar, Madhya Pradesh, Uttar Pradesh, Rajasthan and Orissa) States are far behind in many aspects. The main objective of the Eleventh Plan was faster and inclusive growth and it is going to emphasis in the forthcoming Twelfth Plan also. As the approach paper of the Twelfth Plan said that expanding educational facilities and improving quality of education are key instruments and reducing poverty is a key element for achieving faster and inclusive growth. Various studies proved that there is a strong correlation between poverty and education and many more international studies revealed that improvement in education reducing poverty resulted in regional balanced development. This paper aims to analyze the regional disparities in reducing poverty and increase in literacy (education) in India with the emphasis on State wise analysis. The elasticity concept has used to study the relationship between poverty reduction and educational advancement in the name of “education elasticity of poverty”. Education elasticity of poverty is the change in poverty due to the change in education.
    Keywords: Poverty; Education; Education Elasticity of Poverty; India
    JEL: R10 A20 I3 I21 I32
    Date: 2012–04–05
  7. By: Azzoni, C. R.; Guilhoto, J. J. M.; Haddad, E. A; Hewings, G. J. D.; Laes, M. A.; Moreira, G.
    Abstract: The aim of regional policy is the attainment of a more efficient and/or equitable interregional distribution of economic activity (Temple, 1994). As demonstrated elsewhere (Haddad, 1999), Brazil has undergone, in the last twenty years or so, deep structural changes, responsible for the setback in the process of polarization reversal in the economy. After 1988, with the new Constitution, the central government was hampered by a profound loss in its revenues to the state and municipal governments. Nevertheless, the fiscal crisis reached all levels of government, decreasing their financial capability for carrying out new investment ventures. The lack of investment in economic infrastructure increased the average cost of production; producers were facing increasing costs due to the inefficient mechanisms of trade and transportation, which lagged technologically.
    Keywords: Lula’s Administration; brazil
    JEL: D57 R15 C67
    Date: 2011
  8. By: Greg Kaplan; Sam Schulhofer-Wohl
    Abstract: We analyze the secular decline in interstate migration in the United States between 1991 and 2011. Gross flows of people across states are about 10 times larger than net flows, yet have declined by around 50 percent over the past 20 years. We show that micro data rule out many popular explanations for this decline, including aging of the population, the rise of two-earner households, other compositional changes, regional changes, and the rise in real incomes. We argue instead that the fall in migration is due to a decline in the geographic specificity of occupations and an increase in workers’ ability to learn about other locations before moving there, through both information technology and inexpensive travel. We develop a theory to formalize these ideas and show that a plausibly calibrated version is consistent with cross-sectional and time-series patterns of interstate migration, occupations, and incomes.
    Date: 2012
  9. By: Hong Wang (Yale University); Licheng Zhang (Beijing University); Heng-fu Zou (The World Bank)
    Abstract: One major critique of the Chinese economic reform focuses on disparities in development. This study examines the recent trends in the disparities in health and health care resources across the provinces. This study also examines the relationship between health status, health care resources, and socioeconomic status. A panel data from "All China Data" and China Health Statistic Yearbooks is used in this study. These data include health status, health care resources, and socioeconomic status variables at the provincial level from 1980 to 2003. Index of disparity was used as the indicator for measuring regional disparity in health and health care resources. A fixed effect model was used to estimate the relationships between health status and health care resources and their potential determinants. The results of this study show that the disparities in maternal mortality, number of beds, and number of doctors increased and then declined in most recent years. However, the values of their indexes of disparity in 2002 are still higher than their values in 1985. Therefore the disparities in health status and health care resources across the provinces increased after the economic reform. The results of this study also suggest that socioeconomic status has significant association with health status and health care resources. The association between socioeconomic indicators and health status and health care resources varies in different economic zones.
    Date: 2012
  10. By: Kathryn Parr; William Waite
    Abstract: Opened in 1975, the hartford civic Center was home to the NHL first level team, the Hartford Whalers, and hosted University of Connecticut basketball. This CCEA study demonstrates that the NESE redevelopment plan will increase employment by 1202?1449 annually, on average. Real Gross State Product, a measure of total economic activity, will be $45.7 to $58.4 million higher on average. Net State Revenues will be $7.4 to $8.4 million higher per year. This represents a net present value of $58.3 to $66.6 million net state revenues over a 10 – year time horizon. A more realistic bonding horizon of 20?years gives a net present value of $83.6 to $94.3 million
    Keywords: convention center development; return on investment.
    JEL: R53
    Date: 2011–11

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