The Spatial Economy: Cities, Regions, and International Trade

“In contrast, the majority of geographers have rejected the neoclassical tradition, in their minds associated with spatial analysis and mainstream economics, in favor of neo-Marxian and post-Keynesian political economy—which in turn has diversified into feminist and post-structural approaches.”

“In other words, the ‘new economic geography’ put forward by Paul Krugman and colleagues (Fujita et al., 1999; Krugman, 1991) as an explanation for the tendency of industries of the information age to cluster in cities despite advances in telecommunications, needs to be expanded more explicitly to…”

“In FUJITA et al., 1999, the main models of the `new economic geography’ literature are summarized formally.”

“…France 2Centre d’Analyse et Mathématique Sociales (CAMS, UMR 8557 CNRS-EHESS), Ecole des Hautes Etudes en Sciences Sociales, 54 bd. Raspail, F-75270 Paris Cedex 06, France 3School of Informatics, Indiana University, 901 E. Tenth st., 47408, Bloomington, IN (Dated: October 8, 2008) We study the…”

“The intricacies of the ‘new economic geography’ (see, e.g., Krugman, 1991a; 1991b; Fujita et al., 1999; Fujita and Thisse, 2002; Baldwin et al., 2003) need not detain us here.”

“FUJITA et al., 1999, admittedly restrain from discussing The crucial implication of Starrett’s theorem is thatpolicy.”

“1 The theoretical foundations of agglomeration are discussed in Fujita et al. (1999), Fujita and Thisse (2002) and Duranton and Puga (2004).”

“With advances in the treatment of imperfect competition, the field of economic geography had also revived during the 1980s (KRUGMAN, 1995; FUJITA et al., 1999).”

“Nevertheless, the development of core–periphery theory in Krugman’s New Economic Geography model (KRUGMAN, 1991a, b, 1998a, b; VENABLES, 1996; FUJITA et al., 1999) continues to be highly influential in European spatial thinking.”

“Therefore, it is fair to say that “real-world geographical issues cannot be easily mapped into tworegional analysis” (Fujita et al. (1999), pp.79), and the multi-regional framework is a prerequisite for systematic empirical research as well as for practical applications of the NEG theory.”

“This does not seem a very realistic assumption, however, if we take into account that geography plays a major role in the distribution of economic activity (Fujita et al., 1999), such that neighbouring economies are more likely to converge than distant ones.”

“Similarly, Krugman (1991) acknowledges that Kaldor's vision of cumulative processes inspired subsequent work in new economic geography although this inspiration goes unacknowledged in Fujita et al (1999).”

“According to economic theory, the private pro fi tability of using land is re fl ected in the land rent (more precisely, the land rent captures the annuity on the maximal present value of private net bene fi ts of land use 50 ).”

“In particular, housing prices are influenced by the distance and time of access to economic centres, which offer employment and an extensive network of services [24].”

“…promotes the creation of compatible systems and cultures, reducing uncertainty and complexity, which are the main obstacles to both knowledge acquisition and exploitation processes (Bathelt, Malmberg, and Maskell 2004; Fujita, Venables, and Krugman 1999; Glaeser 2000; Gordon and McCann 2005).”

“In contrast to this idea, various contributions made within the context of the new economic geography have underlined the important role played by agglomeration economies when it comes to explaining the spatial distribution of economic activity (FUJITA et al., 1999; FUJITA and THISSE, 2002).”

“…for example, Hudson, 2001; Sheppard and Barnes, 2000; Clark et al., 2000b; Bryson et al., 1999; Dicken, 1998; Lee and Wills, 1997), it may be that, as Ron Martin (1999a) has suggested, Paul Krugman’s criticisms of their methodologies (see, for example, Fujita et al., 1999) do need to be acted upon.”

“One particular explanation that received a lot of attention is the effect of agglomeration (see Fujita, Krugman, and Venables, 1999; Duranton and Puga, 2000—for a theoretical account; see Ciccone and Hall, 1996; Ciccone, 2002—for an empirical account on U.S. and E.U. regions, respectively).”

“…Prägung der räumlichen Verteilung hinsichtlich der Erzielung von Bildungsabschlüssen innerhalb der Regionen der Europäischen Union spielt, ausgehend von einer Erweiterung des wirtschaftsgeografischen Standardmodells mit zwei Sektoren (Landwirtschaft und Produktion) nach Fujita et al. (1999).”

“636-655 HAMNETT, C. (1997), A stroke of the Chancellor’s pen: the social and regional impact of the Conservative’s 1988 higher rate tax cuts, Environment and Planning A, 29, 129-147 HARVEY, D (2011) Crises, geographic disruptions and the uneven development of political responses, Economic Geography 87(1), 1–22.”

“New Economic Geography attempts to explain how agglomeration arises in the first instance (FUJITA et al., 1999) and also the means by which infrastructure affects the extent and pattern of agglomeration (BALDWIN et al., 2003).”

“Despite their powerful effects, those deciding national development policies did so without much explicit consideration of the concept of regions having spatial dimensions or of where economic activity takes place and why (Krugman, 1992; Fujita et al., 1999).”

“It has been asserted, for example, that the nature of FUJITA et al., 1999.”

“The New Economic Geography approach states that the outcome depends on the balance between centripetal and centrifugal forces (Krugman, 1991; Fujita et al., 1999) and transportation costs are a central element in determining this balance.”

“Thus, contrary to the position adopted by Fujita et al. (1999), the problem is not the absence of a micro-economic theory in Christaller’s book, but the lack of sophistication of the microeconomic hypothesis, leading to an underestimation of the attractivity of larger centres.”

“Also the new economic geography – according to which multiple equilibria may exist – focuses attention on income rather than on unemployment (Fujita et al. 1999).”

“In particular, our model is related to the NEG literature (Fujita et al., 1999, Baldwin et al., 2003) and the equilibrium unemployment theory (Pissarides, 1990).”

“…of engagement between transport and economic geography can be taken from the wide-ranging and often vigorous debate between geographical economists (see Fujita et al, 1999; Krugman, 1991) and economic geographers (see Amin and Thrift, 2000; Martin, 1999; Martin and Sunley, 1996; Sheppard, 2001).”

“As echoed in the economic geography literature (e.g. Krugman 1991; Fujita, Krugman, and Venables 1999; Redding and Venables 2004), firms clustering together could generate a positive mutual effect on their productivity, known as agglomeration economies or sometimes referred to as…”

“12 Gramlich, 1974). Thus, following Blinder and Esaki (1978), and Breen and Garcia-Peñalosa (2005), I include some controls for macroeconomic stability, namely the deviation of growth rate of real per capita GDP from its average value computed over the 1977-2003 period and the inflation rate.”

“Indeed, models of economic geography have mainly focussed on the special case of two regions (Krugman, 1991; Fujita et al., 1999; Ottaviano et al., 2002).”

“One theory which makes strong predictions about regional price levels is Krugman’s New Economic Geography (Krugman, 1991; Fujita et al., 1999).”

“…for this caveat is that several contributions developed within the so-called new economic geography framework have shown that the degree of regional inequality may have a direct effect on the national development level via agglomeration economies (Fujita et al., 1999; Fujita and Thisse, 2002).”

“…contextualize location patterns relative to national employment and innovation variables (Porter 1998; Scott 2005) or of economic models based on assumed conditions that establish the common rules of industrial clustering (Krugman 1991; Fujita, Krugman, and Venables 1999; Fujita and Thisse 2002).”

“The benefits that seaports bring for their economies were widely researched in literature and include reducing transport costs [2,3] and increasing accessibility which directly reduces production factor costs [4,5], increases private investment, encourages trade [6], increases labor productivity and improves education…”

“The economic geography literature stresses the importance of mobility, transport costs and travel time for the growth (and origin) of municipalities (see in particular chapter 8-13 in Fujita et al. (1999)).”

“Models of economic geography emphasize forward and backward linkages, spillovers, and scale economies as centripetal forces, while costs of commuting and congestion, or more generally costs induced by agglomeration, act as centrifugal forces (Fujita et al., 1999).”

“These are all matters of fundamental importance, in agriculture in particular, given the lack of mobility or low level of mobility that in turn re fl ect strong attachment to a given place (Fujita et al., 1999).”

“1 See in particular Helpman and Krugman (1985), Ethier (1987), Krugman (1989) and Helpman (1990).”