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2015 | OriginalPaper | Buchkapitel

Towards a Multiregional NEG Framework: Comparing Alternative Modelling Strategies

verfasst von : Pasquale Commendatore, Valerio Filoso, Theresa Grafeneder-Weissteiner, Ingrid Kubin

Erschienen in: Complexity and Geographical Economics

Verlag: Springer International Publishing

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Abstract

This chapter reviews the New Economic Geography (NEG) models that explain the uneven distribution of economic activity across space employing endogenous agglomeration processes, and the interplay of agglomeration and dispersion forces. Unlike the two-region models that have a restricted applicability, this chapter focuses on the multiregional NEG models recently developed in the literature, reviews their contributions systematically and compares different modelling strategies. As unifying framework, we use the footloose entrepreneur model considering the role and nature of transport costs, and the welfare properties of the spatial equilibria and the design of optimal economic policies.

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Vorheriges Kapitel Introduction

Nächstes Kapitel Parametric Models in Spatial Econometrics: A Survey

In some other models the same result is obtained via different growth rates of regional factor stocks—as e.g. in the constructed capital model (put forward by Baldwin 1999).

The building up of a manageable multiregional model, where the number of regions is finite but not limited to a small number, represents one of the research frontiers of the NEG paradigm (see Fujita and Thisse 2009). Recent attempts in this direction are those by Akamatsu and Takayama (2009), Bosker et al. (2010), Ikeda et al. (2010, 2012), Akamatsu et al. (2012).

Our definition of C does not include only countries but also trade blocs with different degrees of integration. For example, in a model with C = 2, one of the two trade areas could represent the EU and the other one any outside country/bloc.

Indeed, at the bifurcation point, this condition can be reduced to \(\frac{1} {V _{2}\left (x_{t}\right )}\left (\frac{\partial ^{2}V _{1}\left (x_{t}\right )} {\partial x_{t}^{2}} -\frac{\partial ^{2}V _{2}\left (x_{t}\right )} {\partial x_{t}^{2}} \right ) = 0\), the validity of which can be shown using the same procedure adopted by Pflüger and Südekum (2008, p. 46).

We leave the full dynamical analysis of the system to future work.

In addition, Ottaviano et al. (2002) and Pflüger and Südekum (2008) also analyse a second-best solution for the social planner, i.e., a solution in which the social planner is assumed not to change market prices, but only to optimally choose the factor location.

Note, however, that they do not consider stability issues in the social planner solution.

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Titel: Towards a Multiregional NEG Framework: Comparing Alternative Modelling Strategies
verfasst von: Pasquale Commendatore
Valerio Filoso
Theresa Grafeneder-Weissteiner
Ingrid Kubin
Verlag: Springer International Publishing
Buch: Complexity and Geographical Economics
Print ISBN: 978-3-319-12804-7

Electronic ISBN: 978-3-319-12805-4

Copyright-Jahr: 2015
DOI: https://doi.org/10.1007/978-3-319-12805-4_2

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