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Erschienen in: The Annals of Regional Science 2/2018

29.05.2018 | Original Paper

A prospective review on New Economic Geography

verfasst von: José M. Gaspar

Erschienen in: The Annals of Regional Science | Ausgabe 2/2018

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Abstract

This paper serves as an orientation towards the understanding of some of the contributions and theoretical limitations in New Economic Geography and seeks to provide a prospective assessment of new avenues of research along which the field could improve and develop. We identify many of the persistent features and assumptions which have thwarted the evolution of New Economic Geography and led to a sprawl of criticism within the field. This criticism has opened a discussion towards the identification of new possible directions, some of which are being progressively undertaken, while others raise issues that are difficult to overcome both analytically and empirically.

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Fußnoten
1
Krugman (1991a) anticipated the negative reaction of geographers towards NEG.
 
2
For a more comprehensive overview the early literature on urban economics, I refer the reader to the monograph by Henderson and Thisse (2004).
 
3
The HME can be interpreted from two different perspectives: (i) that of more a than proportional industry share in the larger market; or (ii) higher real wages in larger regions (Behrens et al. 2009).
 
4
The combination of the market size and market-crowding effects determines whether larger markets do, in fact, attract more industry. They determine the strength of the HME (Combes et al. 2008).
 
5
The term proper is used to identify this community as being comprised of geographers.
 
6
For a more comprehensive overview on these debates and the (lack of) inter-disciplinarity between both fields, we refer the reader to the works by Duranton and Rodríguez-Pose (2005) and Rodríguez-Pose (2010).
 
7
It is also important to mention other sources of urban costs, due to housing as in Helpman (1998) or due to congestion as in Duranton and Puga (2004), Alonso-Villar (2008), Südekum (2009), Zierahn (2013), Brinkman (2016).
 
8
Considerations regarding agricultural costs were briefly covered in Sect. 2. The role of different productive sectors shall be addressed briefly in Sect. 5.
 
9
This need not be always true. In fact, Gaspar et al. (2017a, b) recently showed that this is not necessarily true if we compare a 2-region model with a model with three or more regions.
 
10
Paul Krugman rebutted these critiques based on the ground that while local specificities and discursive persuasion should not be disregarded, NEG was initially “designed to attract the attention of mainstream economists” (Krugman 2010).
 
11
See Fujita et al. (1999b) or Baldwin et al. (2003) for a more comprehensive description.
 
12
The second edition of Fujita and Thisse’s Economics of agglomeration: cities, industrial location, and globalization also addresses forward-looking behaviour. See Fujita & Thisse (2013, Chap. 8.2).
 
13
However, it is not our contention that disentangling between concepts of vertical differentiation interpreted in terms of differences in cost efficiency and differences in product quality is unimportant. A more involved discussion about technological and innovation processes remits to discussing the micro-foundations regarding the creation, transfer and spatial diffusion of knowledge. We relegate this to Sect. 4.4.
 
14
The mechanism is detailed nicely but also succinctly in Fujita and Thisse (2013).
 
15
The latter’s main focus is on a multi-regional setting and is thus discussed in Sect. 4.3.
 
16
According to Redding and Rossi-Hansberg (2017), QSE models require a structure that combines different factors such as preferences, technologies and frictions concerning the mobility of goods, agents, and ideas. For an extensive taxonomy of these factors, we refer the interested reader to this excellent review.
 
17
Pellegrini and Fotheringham (2002) provide an overview on different modelling strategies concerning location choice decisions. Most of these models are, however, based on discrete choice models.
 
18
It follows that the CES is the special case of a constant RLV.
 
19
A feature which is also present in the paper by Ikeda et al. (2012).
 
20
The concept of real market potential is the sum of regional firm expenditures discounted by the degree of competition in the corresponding region.
 
21
Wal and Boschma (2009) provide suggestions on how to tackle geographical networks using network analysis techniques. Broekel et al. (2014) discuss different methods of modelling endogenous knowledge networks incorporated in “exogenous geography”.
 
22
Neffke et al. (2011) developed an index of technological relatedness regarding the evolution of Swedish regions and find evidence of strong path-dependency in the sense that emerging industries that are technologically more related to the pre-existing industry in a region are more likely to cluster in that region.
 
23
Noteworthy, not all Schumpeterian growth models involve stochastic processes of innovation. See, for example, Peretto (2012, 2015).
 
24
Other interesting contributions on the size and spatial distributions are Picard and Tabuchi (2013), who focus on the role of vertical linkages, or Ghiglino and Nocco (2017), who consider the role of conspicuous consumption in a standard NEG model.
 
25
Bragard and Mossay (2016) recently studied a model of social interaction, focusing on the qualitative properties of spatial equilibria, namely their stability.
 
26
For a comprehensive NEG non-related theory of offshoring, I refer the reader to Grossman and Rossi-Hansberg (2008).
 
27
See Behrens and Robert-Nicoud (2015) for a survey on recent contributions along similar paths towards creating a unifying framework for agglomeration theory.
 
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Metadaten
Titel
A prospective review on New Economic Geography
verfasst von
José M. Gaspar
Publikationsdatum
29.05.2018
Verlag
Springer Berlin Heidelberg
Erschienen in
The Annals of Regional Science / Ausgabe 2/2018
Print ISSN: 0570-1864
Elektronische ISSN: 1432-0592
DOI
https://doi.org/10.1007/s00168-018-0866-5

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