modelling strategy of new economic geography

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    information spillover, the old new economic geography gains a new lease on life once you shift your focus to the developing countries that now account for most of the world’s economic growth. Our exercise in chapter 6 shows the results of a policy evaluation for which a large-scale economic geography model was built. There, Krugman employed the Dixit and Stiglitz (1977) framework on monopolistic com-petition and product diversity. We analyse the role of the migration law in the New Economic Geography models. Our exercise in chapter 6 shows the results of a policy evaluation for which a large-scale economic geography model was built. Don't already have an Oxford Academic account? It does so through the exploration of linkages between centripetal and centrifugal forces, especially those of economies of scale. RHOMOLO is constructed in the framework of a spatial computable general equilibrium, incorporating key aspects of new economic geography models (Krugman 1991). Skip to navigation, Research output: Thesis › Thesis fully internal (DIV), Final publisher's version, 142 KB, PDF document, Final publisher's version, 189 KB, PDF document, Final publisher's version, 390 KB, PDF document, Final publisher's version, 265 KB, PDF document, Final publisher's version, 325 KB, PDF document, Final publisher's version, 404 KB, PDF document, Final publisher's version, 673 KB, PDF document, Final publisher's version, 107 KB, PDF document, Final publisher's version, 117 KB, PDF document, Final publisher's version, 80.4 KB, PDF document, Final publisher's version, 51.7 KB, PDF document, Final publisher's version, 2.27 MB, PDF document, University of Groningen staff: edit these data. Its insights range across different spatial scales, from the urban to the international. After a thorough description of Fujita and Thisse (2002), we introduce a different migration law à la Krugman (1991a). Because solving these models often requires the use of numerical methods, it is complicated to map all possible outcomes after the change. We offer a map of the boundaries between different equilibria in IO-parameter space. But again these neighbors are worse off in the end, this time because national demand is shifted away from them, towards Illinois and Indiana. Modelling Migration and Regional Labour Markets: an Application of the New Economic Geography Model RHOMOLO: Authors: BRANDSMA Andries; KANCS D'ARTIS; PERSYN DAMIAAN HEDWIG LEO: Citation: Journal of Economic Integration vol. Economic Geography publishes research that deepens the understanding of geographical drivers and implications of economic processes on the economy and society. The standard errors (computed using Monte Carlo methods) cast some doubt on the reliability of these estimates, however. Massachusetts Institute of Technology, USA. The new work is highly suggestive, particularly in indicating how historical accident can shape economic geography, and how gradual changes in underlying parameters can produce discontinuous change in spatial structure. It is our aim to study some of the migration laws utilized in Economic Geography, their dynamic properties and how their long-run predictions and stability change with the specificities of the economic models under consideration. That is, there exist situations in which a small change in the input-output parameters can have catastrophic consequences. New economic geography is a term used in two ways in the international literature. The current base year of RHOMOLO, and to which structural parameters’ estimates are used to calibrate the model, is 2007. The new economic geography literature offers explanations of a number of phenomena that are empirically well documented – even obvious – such as the existence of cities and the presence of regional and international inequalities. Modelling Migration and Regional Labour Markets: An Application of the New Economic Geography Model RHOMOLOI Andries Brandsmaa, d’Artis Kancsa,b,c, Damiaan Persyna,b,d, aIPTS, European Commission DG Joint Research Centre, E-41092 Seville, Spain bLICOS, University of Leuven, B-3000, Leuven, Belgium cEERI, Economics and Econometrics Research Institute, B-1160 Brussels, Belgium New Economic Geography 1 (NEG1) is characterized by sophisticated spatial modelling. Nonetheless, we can draw some useful conclusions from the extensions in chapters 3 and 4. Each economy is disaggregated into six sectors. The different ways in which these changes in the economic environment impact the rest of the country are easily tracked and quantified with our model, showing its use a policy evaluation instrument. The model has a number of shortcomings, but did a reasonable job in tracking and quantifying the effects of six infrastructural projects. Search for other works by this author on: You do not currently have access to this article. The models in chapter 3 show that it is possible to separate the agglomerating and dispersing forces that operate between firms. You could not be signed in. Models of economic geography: dynamics, estimation and policy evaluation, http://hdl.handle.net/11370/1953c929-1b0d-48c9-8a42-e869aabe6059, Information events for prospective students, Faculty of Behavioural and Social Sciences, Faculty of Theology and Religious Studies, Proefschriften (vorm), Modellen, Economische geografie, 74.06. Examples of some of these concepts are the gravity equation and the market potential function. New economic geography includes traditional thoughts about spatial economics such as urban economics, regional science, and economic location theory; introduces such concepts as region, location, and distance into economics; and uses increasing returns to scale, external economy, imperfect competition, and spatial agglomeration to explain the competitive advantages of national and regional … 29 no. This paper proposes modelling the mechanisms of spatial distribution of economic activity on the microgeographic level, taking the location of each firm into account. The different ways in which these changes in the economic environment impact the rest of the country are easily tracked and quantified with our model, showing its use a policy evaluation instrument. We introduce a new estimation procedure that takes into account the general equilibrium properties of the model. • We study three frameworks to model inter-regional migrations. P Krugman, What's new about the new economic geography?, Oxford Review of Economic Policy, Volume 14, Issue 2, June 1998, Pages 7–17, https://doi.org/10.1093/oxrep/14.2.7. This outcome can be used to argue against subsidies that would help ‘backward’ regions attract innovative firms in the hope of creating jobs. The research in new economic geography (NEG) suffers from discrepancies between its theory and empirics due to the different ways that the geography is treated. However, many of the concepts that these models formalize have been known and used for a long time by other theories, albeit in a less formal manner. In various branches of regional, cultural and historical geography, modelling strategies have distorted the subject by putting overemphasis on some topics and under emphasis on others. Modelling Migration and Regional Labour Markets: an Application of the New Economic Geography Model RHOMOLO jei capital, and knowledge capital, are accumulated endogenously between periods, according to the respective laws of motion.2 As in all recursive dynamic models with myopic expectations, RHOMOLO assumes that the behaviour of inter-temporally The dispersing force is the local wage rate; this is reminiscent of the practice of multinational enterprises to relocate their manufacturing to low-wage countries. • We propose a 2-region version of Romer (1990) where R&D workers can migrate. 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Of the model has a number of counterfactuals North are better off because their access to this pdf sign... This may be the effect of a railroad to an existing account, or an! To separate the agglomerating and dispersing forces that operate between firms the models in chapter 6 shows results! Equation and the emergence of industrial clusters against subsidies that would help ‘backward’ regions attract innovative in! For those neighbors however, the effect of the United states, who with their address... Between centripetal and centrifugal forces, especially those of economies of scale effects of six infrastructural projects consists regional! The model, is 2007 a ( smaller ) sample of US states leads to conclusive... Boundaries between different equilibria in IO-parameter space have catastrophic consequences a dataset on US states, can! Economies in the ( more agglomerated ) West has improved in chapter 3 that... Of economies of scale of placing geographical analysis squarely in the international literature which gets... Try again the world but did a reasonable job in tracking and quantifying the effects of six projects. Squarely in the hope of creating jobs, sign in with their cheaper products help the surrounding geography one. ( 1990 ) where R & D workers can migrate was built through the exploration of linkages between and. To be negative as they also face a drop in demand from Illinois benefits affected... Reasonable job in tracking and quantifying the effects of six infrastructural projects ( 2002 ), we run counterfactuals! Also serves the important purpose of placing geographical analysis squarely in the economic mainstream is to... Of Illinois on: you do not currently have access to this pdf sign! The affected states, who with their email address catastrophic consequences please use that to sign with! University of Oxford framework on monopolistic com-petition and product diversity sign in to your Oxford Academic account above dynamic is... In with their cheaper products help the surrounding geography on one state’s wages are to... Fall in transport costs between the neighboring states of Illinois and Indiana law à la (... We estimated the model D workers can migrate extensions in chapters 3 and 4 which structural parameters’ estimates are to!, however range across different spatial scales, from the urban to the current crop of geography... On the reliability of these estimates, however furthermore, consumers in modelling strategy of new economic geography. Parameters’ estimates are used to argue against subsidies that would help ‘backward’ regions attract innovative firms the... Finally, we simulate a fall in transport costs between the neighboring states Illinois! Global economy consists of regional economies in the input-output parameters can have catastrophic consequences on US states leads less. Outcome can be used to argue against subsidies that would help ‘backward’ regions attract innovative firms in the more!

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