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on Economic Geography |
| By: | Stephen J. Redding |
| Abstract: | This paper reviews recent research in spatial economics. The field of spatial economics is concerned with the determinants and effects of the location of economic activity in geographic space. It analyses how geographical location shapes the economic activities performed by agents, their interactions with one another, their welfare, and the effects of public policy interventions. Research in this area has benefited from the simultaneous development of new theoretical techniques, new sources of geographic information systems (GIS) data, rapid advances in computing power, machine learning and artificial intelligence, and renewed public policy interest in infrastructure and appropriate policies towards places “left-behind” by globalization and technology. Among the insights from this research are the role of goods and commuting market access in determining location choices; the conditions under which the location of economic activity is characterized by multiple equilibria; the circumstances under which temporary shocks can have permanent effects (hysteresis or path dependence); the heterogeneous and persistent impact of local shocks; the magnitude and spatial decay of agglomeration economics; and the role of both agglomeration forces and endogenous changes in land use in shaping the impact of transport infrastructure improvements. |
| JEL: | F15 R10 R12 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33125 |
| By: | Stephen J. Redding |
| Abstract: | This paper reviews recent quantitative urban models. These models are sufficiently rich to capture observed features of the data, such as many asymmetric locations and a rich geography of the transport network. Yet these models remain sufficiently tractable as to permit an analytical characterization of their theoretical properties. With only a small number of structural parameters (elasticities) to be estimated, they lend themselves to transparent identification. As they rationalize the observed spatial distribution of economic activity within cities, they can be used to undertake counterfactuals for the impact of empirically-realistic public-policy interventions on this observed distribution. Empirical applications include estimating the strength of agglomeration economies and evaluating the impact of transport infrastructure improvements (e.g., railroads, roads, Rapid Bus Transit Systems), zoning and land use regulations, place-based policies, and new technologies such as remote working. |
| JEL: | R32 R41 R52 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33130 |
| By: | Huq, Umana; Batabyal, Amitrajeet |
| Abstract: | We analyze inter-city competition between two cities A and B that use taxes to attract heterogeneous members of the creative class. There are three types of creative class members and each type represents a particular occupation. Irrespective of type or occupation, creative class members value local public goods and each city levies a tax to drawn in as many members of the creative class as possible by providing an apposite local public good. In this setting, we accomplish two tasks. First, we describe the equilibrium allocation, i.e., a tax rate for each city and an allocation of creative class members to the two cities. Second, we compare and contrast this equilibrium allocation with the Pareto efficient allocation. |
| Keywords: | Creative Class, Heterogeneity, Inter-City Competition, Pareto Efficiency, Tax |
| JEL: | H21 H4 H41 R12 |
| Date: | 2024–07–12 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122668 |
| By: | RODRÍGUEZ-POSE Andrés; DIJKSTRA Lewis (European Commission - JRC) |
| Abstract: | The European Union (EU) is at a critical juncture as it grapples with a series of structural challenges that have eroded its global competitiveness. While the EU remains an economic leader, the relative decline in its global standing, exacerbated by increasing within-country polarisation and stagnation in many regions, has raised concerns about its long-term economic prosperity and political stability. We argue that improving European competitiveness cannot be achieved without enhancing cohesion across the EU. Economic, social, and territorial inequality, particularly in regions caught in development traps, undermine the Union’s economic potential and its capacity to deliver on other fronts, such as the green and digital transitions or the functioning of the Single Market. Cohesion also contributes to economic prosperity by increasing involvement in the European project and stemming the rise of Euroscepticism. Addressing inequalities through a reformed cohesion policy is, therefore, necessary for the EU to regain its competitive edge and maintain unity in the face of global challenges. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc139556 |
| By: | Bargain, Olivier B. (Université de Bordeaux); Vincent, Rose Camille (Utrecht School of Economics); Caldeira, Emilie (CERDI, Université Clermont Auvergne) |
| Abstract: | Decentralization, championed by international institutions, has been one of the most prominent public sector reforms of the last decades, particularly in sub-Saharan Africa. To date, few studies propose a quasi-experimental evaluation of its capacity to contribute to local development. We exploit the phase-in of decentralization at the commune level in Burkina Faso. We use satellite information on night-time light density as a proxy for local development levels, which has the advantage of being measured and comparable over time and space. The communes that were decentralized first can be compared to the others after the reform relative to the pre-reform situation. The difference-in-difference approach includes commune fixed effects and inverse propensity score reweighting to account for time-varying differences across communes. We find a positive impact of decentralization on the night-light intensity trends of the early-decentralized communes. This is supported by alternative measures (remote sensing of built-up settlements and a welfare index), which shows the possibly broader scope of decentralization gains. We show that decentralization did not lift all boats: only the communes with the ability to generate own-source revenues benefited from effective decentralization. |
| Keywords: | decentralization, economic development, local development, Africa, Burkina Faso |
| JEL: | H00 H70 H71 H72 O10 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17459 |
| By: | Long, Xianling; Huang, Kaixing; Xu, Shang |
| Abstract: | Employing a spatial equilibrium model and exploiting staggered solar farm installations across Chinese counties, this study reveals that solar energy development reduces local GDP per capita by an average of 2.7\%. This negative effect, primarily from competition for high-value land, is more pronounced in counties with high land opportunity costs. We observe a 2\% increase in the local population despite lower wages and higher housing prices, implying improvements in local amenities. This paper reframes the resource curse debate by examining the impacts of renewable energy, specifically solar power. |
| Keywords: | Solar energy, Land competition, Economic growth, Welfare. |
| JEL: | I31 O13 Q43 Q56 R14 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122651 |