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on Economic Geography |
| By: | Mimosa Distefano; Helene Donnat; Henry G. Overman; Krishan Shah |
| Abstract: | We study productivity disparities across metropolitan and non-metropolitan areas in Great Britain. Spatial disparities in productivity are large and persistent. Using a development accounting framework, we show that differences in area size and in the spatial distribution of human and business capital are key explanatory factors. A combination of area size and human capital explains 30 percent of the productivity variance, increasing to 43 to 57 percent once we add measures of business capital stocks. Applying our framework to a case study of Greater Manchester, we show that large increases in both types of capital are needed to narrow productivity disparities with London, illustrating the scale of the challenge for policies aimed at reducing spatial inequality. |
| Date: | 2026–05–28 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2189 |
| By: | Swati Dhingra; Emily Fry; Sophie Hale; Ningyuan Jia |
| Abstract: | This paper examines the implications of the EU-UK Trade and Cooperation Agreement (TCA) using a dynamic spatial general equilibrium model. Unlike previous studies that primarily projected potential impacts of Brexit based on uncertain scenarios, this analysis introduces new estimates of tariffs and nontariff measures (NTMs) specified by the TCA. The findings show that while the TCA will necessitate substantial adjustments for some sectors, Brexit will not fundamentally alter the overall structure of the UK economy. However, the main impacts will manifest as significant hits to real wages and productivity, exacerbating the long-standing economic challenges faced by the UK. |
| Keywords: | Brexit, EU–UK Trade and Cooperation Agreement (TCA), non-tariff measures, spatial general equilibrium, UK regions and sectors |
| Date: | 2026–05–28 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2187 |
| By: | Pierre-Alexandre BALLAND; Valentina DI GIROLAMO; Florence BENOIT; Julien RAVET; Alexandr HOBZA |
| Abstract: | Fragmentation in the European Union's R&I system is increasingly acknowledged as a major hindrance to its performance. However, theoretical frameworks and empirical evidence remain scarce. This paper introduces a novel complexity-based approach to analyse the competitiveness costs of R&I fragmentation, focusing specifically on hub connectivity as a key metric. Using a comprehensive dataset combining patent records (OECD REGPAT) and scientific publications (OpenAlex) from 2000 to 2023, we examine R&I networks across multiple spatial levels and technological domains. Our analysis identifies three critical findings. First, the European R&I system is much more fragmented compared to the US, with major European hubs showing notably weaker interconnectivity than their US counterparts. Second, we demonstrate that hub connectivity becomes particularly crucial for complex technologies and scientific fields. Third, we find that there is an efficiency gap between the US and Europe in all domains, but it is most pronounced in complex ones, resulting in a substantial competitive disadvantage in strategic sectors. These findings have significant implications for European innovation policy and suggest the urgent need for targeted interventions to enhance cross- regional R&I collaboration in complex technological and scientific domains. |
| Keywords: | Research Fragmentation, Economic Complexity, Inter-Regional Connectivity, Innovation Networks, EU Competitiveness |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2608 |
| By: | Stephan Maurer; Luke Milsom; Ferdinand Rauch |
| Abstract: | We use a parsimonious gravity framework to simulate and compare five potential shocks to the global shipping system: closures of the Panama Canal, the Suez Canal, and the Strait of Malacca, and openings of the Northwest Passage and a hypothetical Kra Canal. Applying a single, consistent methodology across all five scenarios allows relative comparisons. Using carefully measured seaborne distances between ports under each hypothetical geography, we find that a Panama closure would be the most consequential shock, reducing global trade by nearly 3% compared to a default gravity prediction, followed by Suez (2.5%), Malacca, (1.7%), a Kra opening (+0.7%), and the Northwest Passage (+0.6%). Aggregate GDP and welfare effects are more muted, but show sizable heterogeneity across countries. For example, Panama loses over 9% of GDP from a Panama closure, Egypt and Sudan over 5% from Suez, and Malaysia over 4% from Malacca. |
| Keywords: | Gravity, Panama, Suez, Kra, Malacca, Northwest Passage |
| Date: | 2026–05–27 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2186 |
| By: | de Hoyos, Rafael; Rutkowski, Michal |
| Abstract: | The paper examines the European Union's efforts to promote economic and social integration. Despite significant convergence across EU member states, regional inequalities persist, particularly between urban centers and lagging rural areas, fueling Euroscepticism and political polarization. To counter these issues, the paper proposes a three-pronged strategy to strengthen social integration. The European Social Fund+, a vital component of Cohesion Policies, could focus on targeted social assistance programs, such as the Guaranteed Minimum Income (GMI), and combine them with “case management, ” enhancing the effectiveness of social policies in addressing the challenges faced by vulnerable groups. Second, administrative capacities at the local level should be enhanced to ensure an efficient use of Cohesion Policy funds. Finally, the paper recommends fostering policy innovation and rigorous evaluation to adapt social policies to evolving economic challenges, including population aging, technological shifts, and the green transition. This approach could maximize the impact of EU social policies, addressing rising disparities within and between regions to promote a more inclusive and resilient Union. |
| Date: | 2026–01–12 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:hdnspu:207798 |
| By: | OECD |
| Abstract: | Diversifying the industrial base of the Autonomous Province of Trento (Trentino, Italy) is an important policy priority for strengthening productivity growth, given the region’s comparatively smaller manufacturing and knowledge-intensive service sectors relative to peer regions. Drawing on sector-level employment data for 107 Italian regions and 611 local labour market systems, this paper maps the relatedness between economic activities in Italy to identify Trentino’s existing clusters of strength and realistic pathways for industrial upgrading. The analysis underscores that diversification opportunities are shaped by capabilities embedded in current specialisation patterns, reflecting the path-dependent nature of industrial development. The paper proposes a tailored industrial strategy that matches sector-specific interventions to local conditions: supporting competitiveness in established clusters, scaling up related emerging industries and fostering experimental diversification into strategic fields. |
| Keywords: | cluster development, economic complexity, industrial upgrading, relatedness, subnational productivity |
| JEL: | O14 O25 R11 R12 |
| Date: | 2026–06–09 |
| URL: | https://d.repec.org/n?u=RePEc:oec:cfeaaa:2026/09-en |