New Economic Geography

2020 ◽  
Author(s):  
Ching-mu Chen ◽  
Shin-Kun Peng
Keyword(s):  
General Equilibrium ◽  
Economic Geography ◽  
Empirical Studies ◽  
Spatial Models ◽  
Reduced Form ◽  
New Economic Geography ◽  
Economic Activities ◽  
Economic Agents ◽  
Spatial Economy ◽  
Spatial Configurations

For research attempting to investigate why economic activities are distributed unevenly across geographic space, new economic geography (NEG) provides a general equilibrium-based and microfounded approach to modeling a spatial economy characterized by a large variety of economic agglomerations. NEG emphasizes how agglomeration (centripetal) and dispersion (centrifugal) forces interact to generate observed spatial configurations and uneven distributions of economic activity. However, numerous economic geographers prefer to refer to the term new economic geographies as vigorous and diversified academic outputs that are inspired by the institutional-cultural turn of economic geography. Accordingly, the term geographical economics has been suggested as an alternative to NEG. Approaches for modeling a spatial economy through the use of a general equilibrium framework have not only rendered existing concepts amenable to empirical scrutiny and policy analysis but also drawn economic geography and location theories from the periphery to the center of mainstream economic theory. Reduced-form empirical studies have attempted to test certain implications of NEG. However, due to NEG’s simplified geographic settings, the developed NEG models cannot be easily applied to observed data. The recent development of quantitative spatial models based on the mechanisms formalized by previous NEG theories has been a breakthrough in building an empirically relevant framework for implementing counterfactual policy exercises. If quantitative spatial models can connect with observed data in an empirically meaningful manner, they can enable the decomposition of key theoretical mechanisms and afford specificity in the evaluation of the general equilibrium effects of policy interventions in particular settings. Several decades since its proposal, NEG has been criticized for its parsimonious assumptions about the economy across space and time. Therefore, existing challenges still require theoretical and quantitative models on new microfoundations pertaining to the interactions between economic agents across geographical space and the relationship between geography and economic development.

scholarly journals Of Hype and Hyperbolas: Introducing the New Economic Geography

2001 ◽  
Vol 39 (2) ◽  
pp. 536-561 ◽  
Author(s):  
J. Peter Neary
Keyword(s):  
Decision Making ◽  
General Equilibrium ◽  
Economic Geography ◽  
Building Blocks ◽  
New Economic Geography ◽  
Rational Decision ◽  
Equilibrium Models ◽  
Trade Off ◽  
Rational Decision Making ◽  
Spatial Economy

Reviewing The Spatial Economy by Fujita, Krugman, and Venables, this paper argues that the key contribution of the new economic geography is a framework in which standard building blocks of mainstream economics (especially rational decision making and simple general equilibrium models) are used to model the trade-off between dispersal and agglomeration. The approach thus gives a choice-theoretic basis for a “propensity to agglomerate.”

scholarly journals Les ressources de territoires et les territoires de ressources

Finisterra ◽  
2012 ◽  
Vol 36 (71) ◽  
Author(s):  
Georges Benko ◽  
Bernard Pecqueur
Keyword(s):  
Economic Analysis ◽  
Free Trade ◽  
Economic Geography ◽  
New Economic Geography ◽  
Service Economy ◽  
Economic Activities ◽  
Free Trade Zones ◽  
Spatial Economy ◽  
International Exchanges

economical geography has known a revival since the 1990s; we even speak of a «new economic geography». Globalisation, metropolisation, the formation of free-trade zones, international exchanges, the linking of the global with the local are all themes at the centre of the concern about spatial economy. But globalisation does not necessarily mean homogenisation of the spaces. The notion of territory reappears in economical analyses because territories offer the market resources that are specific, untransferable and incomparable. These specific resources render the areas diversified and stabilize the emplacement of economic activities. In the next few years, one of the main subjects of research in economic analysis will probably be the study of the process of revealing and eveloping new resources that emerge from the uniqueness of the areas and human groups in a context where information logic controls the service economy.

scholarly journals Transport cost in location practice and economic geography: traditional theories, some new dimensions and policy implications

2014 ◽  
Vol 25 (25) ◽  
pp. 55-67
Author(s):  
Manolis Christofakis
Keyword(s):  
Economic Geography ◽  
Spatial Organization ◽  
Raw Materials ◽  
Empirical Studies ◽  
Policy Implications ◽  
Transport Cost ◽  
The Political ◽  
Political Practice ◽  
Economic Activities ◽  
Theoretical Approaches

Abstract This paper outlines the main theoretical approaches to the role of transport in spatial organization and investigates possible new extensions at a theoretical and practical level, focusing on the analysis of transport cost. Beginning from the traditional theories of spatial distribution and the location of economic activities under transport cost, the analysis focuses on the related approaches of the new economic geography, which are based on the assumptions of the known “iceberg cost”. After that, through the presentation of indicative empirical studies, the paper attempts to clarify new issues that should be taken into account in the relevant theoretical considerations as well as in the political practice. Thus, factors such as the change of production structure in the modern economies with the production of more quality products, lower mass, and higher relative value and intangible goods, in combination with the improved transport technology, have contributed to a continuous reduction of the transport cost of raw materials and productive goods over the years. These developments along with the growing importance of cost of moving people should be taken into account in the new theoretical interrogations and the political practice of regional and urban development

scholarly journals Stability of Bifurcating Patterns of Spatial Economy Models on a Hexagonal Lattice

2018 ◽  
Vol 28 (11) ◽  
pp. 1850138 ◽  
Author(s):  
K. Ikeda ◽  
H. Aizawa ◽  
Y. Kogure ◽  
Y. Takayama
Keyword(s):  
Scalar Field ◽  
Economic Geography ◽  
Bifurcation Analysis ◽  
Hexagonal Lattice ◽  
Self Organization ◽  
New Economic Geography ◽  
Economy Model ◽  
Spatial Economy ◽  
Numerical Bifurcation ◽  
Numerical Bifurcation Analysis

Self-organization of spatial patterns is investigated for a scalar field of a system of locations on a hexagonal lattice. Group-theoretic bifurcation analysis is conducted to exhaustively try and find possible bifurcating patterns. All these patterns are proved to be asymptotically unstable for general spatial economic models in new economic geography. Microeconomic interactions among the locations are expressed by a spatial economy model and all bifurcating patterns are demonstrated to be unstable by numerical bifurcation analysis.

scholarly journals SCIENTIFIC FOUNDATIONS OF THE SPATIAL ECONOMY AND THE THEORY OF NEW ECONOMIC GEOGRAPHY

2020 ◽  
Vol 70 (4/2020) ◽  
pp. 32-41
Author(s):  
M. V. Ivanova ◽  
◽  
A. S. Kozmenko ◽  
Keyword(s):  
Economic Development ◽  
Economic Geography ◽  
Spatial Organization ◽  
Regional Economy ◽  
Spatial Development ◽  
The Arctic ◽  
New Economic Geography ◽  
Economic Space ◽  
Spatial Economy ◽  
Communications System

The modern political and economic processes have had a significant impact on the change in the economic policy of Russia and its “internal” economic space. As a result of the “sanction” blocking of the significant sectors of the economy, the importance of considering the spatial factor of socio-economic development in the basic development program documents has increased. The article examines the main approaches to spatial organization of the regional economy and strategic directions of spatial development in the context of the “Strategy of Spatial Development of the Russian Federation for the Period up to 2025”. These approaches are based on the joint evolution of this organization and the regional settlement system under the influence of a multiple external and internal factors, including the implementation of a rational state policy of regional development. The study examines the main provisions of the spatial economy as an independent scientific field and the theory of new economic geography. It shows the methodological similarity between these two scientific disciplines. The article shows that the basis of spatial development is the integration of specific forms of spatial organization of the economy into large and / or largest agglomerations. The leading role in this integration belongs to the regional communications system, which unites economic centers localized in an allocated space into an integral system and ensures the economic space unity. The implementation of the spatial economy provisions is studied on the example of the Northern Sea Route as a regional communications system, which is in fact the center of the “assembly” of the Arctic space. The functional dominant of the agglomeration as a form of spatial organization of the regional economy is creating such high-quality life conditions that are optimized with the rational economic development of the regional space while maintaining the economic situation at an acceptable level. These are the conditions that form communicative ties, which are the framework for uniting various elements of the regional space.

The Contribution of New Economic Geography

2020 ◽  
Author(s):  
Pascal Mossay ◽  
Pierre M. Picard
Keyword(s):  
Economic Geography ◽  
Urban Areas ◽  
Multiple Equilibria ◽  
Market Access ◽  
Experimental Methodology ◽  
Empirical Literature ◽  
New Economic Geography ◽  
Spatial Concentration ◽  
Transport Costs ◽  
Economic Activities

New Economic Geography (NEG) provides microeconomic foundations for explaining the spatial concentration of economic activities across regions, cities, and urban areas. The origins of the NEG literature trace back to trade, location, and urbans economics theories. In NEG, agglomeration and dispersion forces explain the existence of spatial agglomerations. A NEG model usually incorporates a combination of such forces. In particular, firm proximity to large markets and the importance of linkages along a supply chain are typical agglomeration forces. Equilibria properties derived from NEG models are very specific to NEG as they involve multiple equilibria and have a very high dependence on changes in parameters. This phenomenon has important implications for the emergence of nations, regions, and cities. In particular, high transport costs imply the dispersion of economic activities, while low transport costs lead to their spatial concentration. The same forces that shape inequalities and disparities between regions also shape the internal structure of cities. Firms concentrate in urban centers to gain greater access to larger demand. The empirical literature has developed several approaches that shed light on spatial agglomeration and estimate the role and impact of transport costs on market access. A key empirical research question is whether observed patterns could be explained by location amenities or agglomeration forces as put forward by NEG. Quasi-experimental methodology is frequently used for such a purpose. NEG theory is supported by empirical evidence, demonstrating the role of market access.

Economic Geography and the Effect of Environmental Pollution on Agglomeration

2007 ◽  
Vol 7 (1) ◽  
Author(s):  
Andreas Lange ◽  
Martin F Quaas
Keyword(s):  
Environmental Pollution ◽  
Spatial Patterns ◽  
Economic Geography ◽  
New Economic Geography ◽  
Stability Conditions ◽  
Economic Activities ◽  
Unified Framework ◽  
Local Pollution ◽  
Different Types ◽  
The Stability

Abstract We study how local environmental pollution affects spatial patterns of economic activities when workers can migrate. Based on a New Economic Geography model, we analytically characterize the stability conditions for three different types of equilibria: symmetric spreading, partial and full agglomeration. We show that the extent of agglomeration crucially depends on the damages caused by local pollution. We thereby provide a unified framework for discussing different relationships between the extent of agglomeration and trade freeness that have been found in the literature.

New Economic Geography: What about the N?

10.1068/a3730 ◽  
2005 ◽  
Vol 37 (10) ◽  
pp. 1707-1725 ◽  
Author(s):  
Gianmarco I P Ottaviano ◽  
Jacques-François Thisse
Keyword(s):  
Economic Theory ◽  
General Equilibrium ◽  
Policy Analysis ◽  
Economic Geography ◽  
Equilibrium Model ◽  
Location Theory ◽  
General Equilibrium Model ◽  
New Economic Geography ◽  
Mainstream Economic ◽  
Long Time

Since its very appearance, probably thanks to its provocative name, new economic geography (NEG) has stirred a debate on whether it is economic geography proper or rather geographical economics. In both cases, its real novelty has been questioned. We focus on this last issue. In particular, we argue that many NEG ideas have been around for a long time in the works of economic geographers and location theorists. However, NEG has the fundamental merit of having framed those ideas within a general equilibrium model encompassing most of these ideas. This has drawn economic geography and location theory from the periphery to the center of mainstream economic theory. More importantly, it has made already existing ideas more amenable to empirical scrutiny and policy analysis.

Estimation of welfare costs of inflation: The case of Russia

2019 ◽  
pp. 55-69 ◽  
Author(s):  
Sergey M. Drobyshevskiy ◽  
Natalia V. Makeeva ◽  
Elena V. Sinelnikova-Muryleva ◽  
Pavel V. Trunin
Keyword(s):  
Inflation Targeting ◽  
Empirical Studies ◽  
Welfare Costs ◽  
Economic Agents ◽  
Academic Literature ◽  
Russian Economy ◽  
Theoretical Approaches ◽  
Real Gdp ◽  
Quantitative Estimates ◽  
Positive Effect

This paper is devoted to the estimation of welfare costs of inflation, taking into account the peculiarities of the Russian economy. Theoretical approaches that are used in the literature to analyze the costs of inflation are discussed in the paper. It also provides an overview of the empirical studies of this topic. Research found in academic literature shows that the results of quantitative estimates are extremely sensitive to the choice of the functional form of the money demand equation, as well as to assumptions that are made to simplify the analysis, some of which do not fit Russian data. As a result, we have modified the standard approaches to estimating welfare costs of inflation, taking into account the monetization growth in Russia, and provide quantitative estimates of the magnitude of welfare costs of inflation. The results indicate a significant gain for economic agents in terms of real GDP with a decrease in inflation, which is regarded as a positive effect from the inflation targeting policy.

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