Economic Geography: A Review of the Theoretical and Empirical Literature
47 Pages Posted: 18 Feb 2009
Date Written: January 2009
Abstract
This paper reviews the new economic geography literature, which accounts for the uneven distribution of economic activity across space in terms of a combination of love of variety preferences, increasing returns to scale and transport costs. After outlining the canonical core and periphery model, the paper examines the empirical evidence on three of its central predictions: the role of market access in determining factor prices, the related home market effect in which demand has a more than proportionate effect on production, and the potential existence of multiple equilibria. In reviewing the evidence, we highlight issues of measurement and identification, alternative potential explanations, and remaining areas for further research.
Keywords: Home Market Effect, Market Access, Multiple Equilibria, New Economic Geography
JEL Classification: F12, F14, O10
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
The Costs of Remoteness: Evidence from German Division and Reunification
-
The Costs of Remoteness: Evidence from German Division and Reunification
-
A Search for Multiple Equilibria in Urban Industrial Structure
-
Looking for Multiple Equilibria When Geography Matters: German City Growth and the Wwii Shock
By Erik Maarten Bosker, Steven Brakman, ...
-
History and Industry Location: Evidence from German Airports
By Stephen J. Redding, Daniel M. Sturm, ...
-
A Century of Shocks: The Evolution of the German City Size Distribution 1925-1999
By Erik Maarten Bosker, Steven Brakman, ...