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on Economic Geography |
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Issue of 2025–01–27
eight papers chosen by Andreas Koch, Institut für Angewandte Wirtschaftsforschung |
| By: | Clement E. Bohr; Marti Mestieri; Frederic Robert-Nicoud |
| Abstract: | As countries develop, the relative importance of agriculture declines and economic activity becomes spatially concentrated. We develop a model integrating structural change and regional disparities to jointly capture these phenomena. A key modeling innovation ensuring analytical tractability is the introduction of non-homothetic Cobb-Douglas preferences, which are characterized by constant unitary elasticity of substitution and non-constant income elasticity. As labor productivity increases over time, economic well-being rises, leading to a declining expenditure share on agricultural goods. Labor reallocates away from agriculture, and industry concentrates spatially, further increasing aggregate productivity: structural change and regional disparities are two mutually reinforcing outcomes and propagators of the growth process. |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2412.03755 |
| By: | Milene Tessarin; Ron Boschma; Deyu Li; Sergio Petralia |
| Abstract: | This paper presents an evolutionary perspective on regional development traps that centers around the structural inability of regions to develop new and complex occupations. Using European Labor Force Survey data, we follow occupational trajectories of 237 European regions and provide evidence on which regions are trapped, what kinds of traps they have fallen into, and which regions have managed to escape such traps. We find a clear-cut divide in Europe: almost all non-trapped regions are in Northern and Western Europe, while trapped regions are found primarily in South and Eastern Europe. However, this geographical divide does not apply to all types of regional traps. Our results also show that regional development traps are persistent: regions often remain in the same trap, but not always. Our study suggests a feasible pathway for low-complexity regions to overcome a development trap is by building capabilities in related occupations and then diversify into complex occupations. Once complexity levels are high, regions tend not to lose their complexity. |
| Keywords: | regional development traps, evolutionary traps, occupations, relatedness, complexity, low complexity trap, structural trap |
| JEL: | J24 J82 R11 O15 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2501 |
| By: | Pascal Ricordel (EDEHN - Equipe d'Economie Le Havre Normandie - ULH - Université Le Havre Normandie - NU - Normandie Université) |
| Abstract: | A common statement found in regional policy reports is that regional growth is an "export or die" issue. However, the succession of disruptions in the international supply chain has highlighted the crucial roles of domestic activities, local markets and short supply chains, turning the environmental and resilience challenge present in growth policy into a "domestic or die" issue. Recent regional growth theories have seriously questioned export activity as the only way in which to drive regional growth and have highlighted the crucial role of the domestic sector. However, no empirical study has assessed the roles of the domestic and export sectors in growth during this troubled economic period, despite the usefulness of this information for nonbiased policy decisions. Using a spatial endogenous regional growth model as a framework, we investigate the role of the domestic sector during the 1999–2014 period for 263 European Union (EU) Nomenclature of Territorial Units for Statistics (NUTS) regions. The results stress the importance of domestic productivity for regional growth during this period, which is characterized by three economic shocks, thereby elucidating the importance of domestic productivity for competitiveness and resilience issues. |
| Keywords: | domestic export sectors economic base theory endogenous growth model regional Dutch disease regional growth regional resilience spatial model, domestic export sectors, economic base theory, endogenous growth model, regional Dutch disease, regional growth, regional resilience, spatial model |
| Date: | 2024–02–06 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04841821 |
| By: | Lionel Wilner (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Using the 2016 merger of French regions as a natural experiment, this paper adopts a difference-in-differences identification strategy to recover its causal impact on individual subjective well-being. No depressing effect is found in the short term; life satisfaction has even increased in regions that were absorbed from both economic and political viewpoints. The empirical evidence at stake suggests that local economic performance has enhanced in these regions, which includes a faster decline of the unemployment rate. In the context of a unitary state, economic gains have therefore outweighed cultural attachment to administrative regions. |
| Keywords: | Merger of regions, Natural experiment, Difference-in-differences, Subjective well-being, Centralization |
| Date: | 2023–05–01 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04799406 |
| By: | Bill Dupor; Marie Hogan; Jingchao Li |
| Abstract: | While the original papers on the inflation-unemployment relationship, i.e., the Phillips curve, studied aggregate data, a recent generation of work has moved to regional analysis. We estimate Phillips curves in the US based on regional data between 1958 and 2013, from which we can recover the national Phillips Curve. We find that the curves’ evolution over time is characterized by changing cross-region spillovers largely due to a subset of 1970s observations. We show that for these observations, regional inflation exhibits strong negative comovement with national unemployment even after controlling for own region unemployment, resulting in a negative spillover in the regional Phillips curve regression. Aggregating across regional curves, the negative spillover works to steepen the national Phillips curve. The local (regional), spillover and national Phillips curve slopes observed in the data are qualitatively consistent with a simple multi-region monetary model with endogenous monetary policy. |
| Keywords: | local spillover decomposition; Phillips curve |
| JEL: | E3 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedlwp:99477 |
| By: | Eduardo Amaral Haddad; Inaciao F.Araujo |
| Abstract: | This study quantifies the contributions of Brazil’s blue economy and explores the economic interdependence between coastal and hinterland regions through interregional linkages. Employing a multi-level approach, we analyze municipality and state-level data on oceanrelated activities. Using an interstate input-output model, we estimate the value chains of the blue economy, offering a deeper understanding of its systemic impacts. This study addresses gaps in national, regional, and local assessments, providing insights for more tailored policy interventions across Brazil’s diverse coastal regions. As Brazil works towards achieving UN Sustainable Development Goal 14 by 2030, our analysis underscores the structural diversity and regional disparities within the blue economy. We advocate for the coordination of sector and region-specific policies, emphasizing the importance of an integrated regional approach. Such an approach recognizes the interconnectedness of coastal economies, addressing shared challenges and leveraging regional strengths for sustainable development. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rpaeco:rp_08-24 |
| By: | Zenne Hellinga; Julia Bachtrögler-Unger; Pierre-Alexandre Balland; Ron Boschma |
| Abstract: | The Smart Specialization Strategy (S3) is a cornerstone of the EU’s Cohesion Policy, with over €61 billion allocated for Research & Innovation from 2014 to 2020. This paper explores the prioritization of technological domains within regional S3 strategies and their influence on funding allocation of the European Regional Development Fund. Our findings indicate that while regions select a broad range of S3 priorities, they tend to prioritize those more related to their existing technological capabilities. This is particularly true for less developed andtransition regions. The lack of selectivity in S3 strategies appears to be mitigated when these priorities are converted into funding allocations. There we observe that funding allocation appears to align more closely with regional capabilities than initial S3 priorities. We also find that, although the complexity of technologies is somewhat considered in selecting S3 priorities, it seems to gain importance when regions dedicate their funding to specific R&I projects. |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2502 |
| By: | Spellerberg, Annette; Beckmann, Klaus J.; Bruck, Emilia M.; Engelke, Dirk; Hülz, Martina; Höffken, Stefan; Koch, Florian; Libbe, Jens; Memmel, Martin; Othengrafen, Frank; Reinecke, Eva Maria; Schweitzer, Eva |
| Abstract: | Der Einsatz von Künstlicher Intelligenz (KI) schreitet in der Stadt- und Regionalentwicklung voran. Künstliche Intelligenz wird zunehmend in öffentlichen Verwaltungen eingesetzt, nicht zuletzt mit Chatbots wie ChatGPT, in der Verkehrssteuerung und bei Abwägungsprozessen in der formellen Landes- und Regionalplanung sowie Stadtplanung. Positive Wirkungen werden u. a. hinsichtlich der Effizienz in den Verwaltungen oder bei einer Krisenbewältigung, z. B. bei Extremwetterereignissen, erwartet. Risiken werden u. a. in Fragen der Transparenz, der Datenqualität und der Nachvollziehbarkeit der Verantwortlichkeiten für Entscheidungen gesehen. Das Positionspapier soll anregen, über Voraussetzungen für den Einsatz von KI, gesellschaftliche Rahmenbedingungen, Verantwortlichkeiten und Nutzen, aber auch über Resilienz insbesondere in öffentlichen Verwaltungen nachzudenken, die mit ihren Entscheidungen die räumliche Entwicklung prägen. Handlungsempfehlungen für die verantwortlichen Akteure in den Kommunen und in überörtlichen Planungsorganisationen runden den Beitrag ab. |
| Abstract: | The use of artificial intelligence (AI) in urban and regional development is advancing. Artificial intelligence is increasingly used by public administrations, not least in the form of chatbots such as ChatGPT, as part of traffic control management and in assessment processes in formal state and regional planning, and urban planning. Positive effects are expected, for example, in terms of administrative efficiency or in crisis management, e. g. in the event of extreme weather events. Perceived risks relate to issues of transparency, data quality and accountability for decisions. The position paper aims to encourage reflection on the requirements for the use of AI, the social framework conditions, the responsibilities and benefits, and the resilience of public administrations, whose decisions shape spatial development. The paper concludes with recommendations for action to be taken by the responsible actors in municipalities and in supra-local planning organisations. |
| Keywords: | Künstliche Intelligenz (KI), Stadt- und Regionalentwicklung, Verwaltung, Artificial intelligence (AI), urban and regional development, public administration |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:arlpos:308797 |