The Spatial Economy

Quantitative Aspects of the Economic Growth of Nations: VIII. Distribution of Income by Size

This paper analyzes the effects of changes in relative commodity prices on the distribution of income among factors of production in the context of two models of a simple, two-good economy. In the first model capital is treated as a specific factor in each industry, with labor mobile between industries. The assumption of specificity determines the direction of factor income changes, with magnitudes depending on substitutability between factors and on intensities of factor use within the two industries. In the second model, capital is viewed as a quasi-fixed factor. For the short run, this model is identical to the model first considered. For the long run, this model is identical to the Stolper-Samuelson model in which the direction and magnitude of factor income changes depend solely on relative factor intensities. The difference between the short-run and long-run determinants of changes in factor incomes gives rise to a conflict between factor owners' short-run and long-run interests.

The article examines the problem of defining the subject area of regional economics, emphasizing the difficulties and challenges associated with a variety of theoretical approaches, the multilevel nature of economic processes and a variety of methodological approaches. The main areas of research in the regional economy, such as spatial economics, economic geography, theory of regional development and urban economics, are analyzed. Special attention is paid to inter-level interactions and methodological tools used to analyze regional economic processes. It is concluded that an interdisciplinary approach is necessary for a full understanding and development of the regional economy.

Recently, the ‘new economic geography’ literature has developed as a theory of the emergence of large agglomerations which relies on increasing returns to scale and transportation costs. This literature builds on diverse intellectual traditions. It combines the insights of traditional regional science with those of modern trade theory and thus attempts to provide an integrative approach to interregional and international trade. The paper surveys this literature and discusses its relation to earlier approaches to similar topics.

The paper sought to test the impact of international trade on economic growth in Nigeria. The research adopted the causal research design. Time series data sourced from the Central Bank of Nigeria Statistical Bulletin from 1986 to 2019 were used to determine the impact of international trade on economic growth in Nigeria. Economic growth was proxied by Gross Domestic Product while international trade was proxied by trade openness, export, and exchange rate as a moderator. Trend analysis was employed in the analysis and the hypothesis was tested at 5% level of significance. To get a more robust estimate of the effects of the independent variables on the dependent variable, the log of the variables were taken. The unit root test result showed that the log of Gross Domestic Product (GDP), Trade Openness (TOP) and were stationary at level while the log of Exchange Rate (EXCHR) and Export (XP) were stationary at first difference. Consequently, we applied the ARDL model in the analysis. The results showed that Exchange rate and trade openness had negative and significant impact on economic growth while export had positive and significant impact on growth. Nigeria could gain more from international trade if the economy and the production structures becomes responsive and more adaptable to changes both internally and externally on the basis of international economic system. In ever changing and highly competitive global environment, Nigeria needs to continually re-examine, revise and re-evaluate sources of strengths, weaknesses, opportunities and threats (SWOT analysis) in order to develop appropriate policy strategies, that can lead to maximum national benefits from international trade.

This article provides a comprehensive overview of the complex relationship between international trade and economic growth. The research background and importance include the following two aspects. Global economic integration: Accelerating development, international trade has become a key force. Economic connectivity: International trade promotes the integration of global resources, technology, and markets. The theoretical foundation review includes the following two aspects. Traditional international trade theory: absolute advantage, comparative advantage, factor endowment, etc. Modern International Trade Theory: Further Enriching and Improving the Theoretical Framework. In multidimensional empirical analysis, the following aspects are included. Macro level: The impact mechanism of international trade on the overall economy. Optimize resource allocation: improve production efficiency and promote economic growth. Promote technological progress: Introduce advanced technology to enhance industrial competitiveness. Micro level: International trade effects at the enterprise level. Industrial upgrading: International trade promotes the optimization and upgrading of industrial structure. Regional level: Differences in international trade and economic growth among different regions. The research conclusions and policy recommendations include the following aspects. Positive correlation: International trade and economic growth correlate positively and significantly. Policy reference: Provide valuable reference basis for policy makers. Sustainable Development: Helping countries achieve sustained and healthy economic development in the process of globalization.

The current increase of regional inequalities in Europe, and in particular in Central and Eastern Europe (CEE) has led to the reconsideration and revival of the concepts of and in academic fields like regional economics, economic geography and spatial planning as well. In contrast to the classical view on these concepts determined by functionalism and topology, the new theoretical and empirical perspectives are emphasising a multidimensional perspective. In addition, there is an important debate about the relation between economic inequalities and growth. This article provides a critical overview and assessment of the theoretical and empirical work on regional inequalities with special emphasis on theories of economic and social polarisation, regional economic growth, convergence, and social inequalities. We attempt to combine two powerful concepts of polarisation and convergence, emphasising their relational and multi-scalar nature. Building on this basis, we propose a multidimensional concept of socio-economic polarisation, which comprises processes of convergence and divergence, growth and mobility in economic and social dimensions.

Regional Economics and Economic Geography from a Neo-Schumpeterian Perspective

This study proposes a spatial model to examine dynamic interactions among growth, economic geography, the housing market, and public goods in a small, open economic growth model. We emphasize the impact of transport, land and fiscal policy on the spatial economy. The economy consists of the industrial sector, housing sector and local public goods. The model synthesizes the main ideas in the neoclassical growth theory, the Alonso urban model and the Muth housing model within the neoclassical open, small-growth framework. We solve the dynamics of the economic system and simulate the model to demonstrate dynamic interactions among economic growth, the housing market, residential distribution and public goods over time and space. Our simulation demonstrates, for instance, that as the tax rate on land income is increased, the total capital stocks and the stocks employed by the housing and public sectors are increased, the land devoted to local public goods falls and land rents and housing rents rise over space, and the consumption level of industrial goods and the total expenditures on public goods are increased. Our integrating model provides some new insights that cannot be obtained from the component models.

Often in the past, economists have analysed the relation between international trade and national economic growth. For the market economies they have usually concluded that international trade makes a more efficient use of national resources possible and that it generates several multiplicative effects (via incomes and prices of products and production factors) which are likely to enhance economic growth. There are economists who will be inclined to identify in the rapid growth of the recent post-war period the application of many of the theoretical mechanisms of the positive enhancing relation between trade and growth. However, as always happens in the social sciences, various other factors stimulating economic growth have been at play during this period: conscious growth policies of governments, for one; also, the more subtle effect of psychological attitudes in production agents and the population at large, continuously favourable to so-called ‘material’ economic growth. Furthermore, economic growth has had an effect on international trade, facilitating structural readjustments, making possible and accommodating rapid shifts in the relative prices of commodities.KeywordsInternational TradeManufacturing SectorRelative PrexInternational Economic OrderEquipment GoodThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

This book is very stimulating and contains a wide, interesting and motivated collection of models dealing with the role of space and the forces leading to, or contrasting, agglomeration. The starting point is the proof that the competitive equilibrium paradigm is incompatible with agglomeration or indeed with any relevant notion of space since its introduction implies zero transport costs in equilibrium. Consequently spatial, imperfect competition is required to study agglomeration. The book skilfully merges different branches of literature, urban and regional economics, industrial organisation, growth theory and new economic geography, to provide a unified account of the relevance of space in economics. The analysis is based on two forces: localised positive externalities, centripetal, and transport costs, centrifugal. The interplay between these two forces produces the economic landscapes, where agglomeration of cities, commercial and industrial districts and the spatial distributions of skilled workforce and innovative inputs are determined. Urban and economic history are re‐read along the same trade‐off: before the Industrial revolution there were small fixed production, and high transport, costs hence production was fragmented into many small units. After the Industrial revolution, fixed costs of production have increased while transport costs have dramatically decreased leading to a reduction in the number of operating plants and the emergence of agglomeration.

The chapter surveys the main contributions of new economic geography from the point of view of transport analysis. It shows that decreasing transport costs is likely to exacerbate regional disparities. However, very low transport costs should foster a more balanced distribution for economic activities across space. Thus, the spatial curve of development, which relates the degree of spatial concentration to the level of transport costs, would be bell-shaped. The paper also provides a detailed discussion of the main determinants of transport costs, which remain fairly large in most countries. It concludes with a discussion of some policy implications. Key-words: economic geography, transport costs, regional disparities JEL classification: L91, R12, R58 * We gratefully acknowledge Andre de Palma, Robin Lindsey and Kenneth Small for insightful comments.

This volume, comprised of authors from the U.S., Canada, Africa, and Europe, centers on the development, transformation, and role of geographic /regional economies-- specifically in the globalized, post-2009 era. The authors address topics that every region must consider in responding to idea age, globally competitive, regionally driven economies. The volume builds on a large body of scholarship specific to regional economic development and geography by providing a much needed post-2009 perspective on regional economic environments and activities. Among the topics addressed are the emergence and boundaries of new economic geographies; the actors, characteristics, and functions of regional innovation systems as well as the opportunities and challenges associated with region-specific cultural and environmental interactions. It also examines the relationship of regional economies to diminishing country based economies and the critical relationship to globalization.

We describe how endogenous growth theory has now incorporated spatial factors. We also derive some of the policy implications of this new theory for growth and economic integration. We start by reviewing the product variety model of endogenous growth and discuss similarities with modeling techniques in the new economic geography. Both use Dixit-Stiglitz competition. Increasing returns provide an incentive for innovation in endogenous growth theory, and in combination with transport costs, increasing returns provide an incentive for firm location decisions in the new economic geography. Since innovation is the engine of growth in endogenous growth models and knowledge spillovers are a key input to innovation production, we also explore how innovation and knowledge have distinctly spatial characteristics. These modeling similarities and the spatial nature of knowledge spillovers have led to space being incorporated into the theory of endogenous growth. We guide the reader through how space is modeled in endogenous growth theory via the new economic geography. Growth by innovation is a force for agglomeration. When space is included, growth is enhanced by agglomeration because of the presence of localized technology spillovers. We consider the many other spatial factors included in models of space and growth. We explore the spatial effects on economic growth demonstrated by these theoretical models. Lastly, we consider policy implications for integration beyond lowering trade costs and discuss how lowering the cost of trading knowledge is a stabilizing force and is growth enhancing.

This dissertation postulates that the trend of increasing globalization of economic activities within the shifting features of the world economy has been the dominating force transforming and integrating the international economic structure. I adopt ecological theory's external view of system structure, and focus on a more relational view of international exchange. Using network methodology, I analyze the effects of global transactional interactions on economic growth. This research extends concepts of the macro-urban approach to an analysis of international transactions. Based on data for 93 nations over a 20-year period (1970-1978 and 1978-1990) from three transactional networks (93 x 93 matrices), major effects of international trade, capital, and labor flows on global economic structure and growth are carefully examined. Results indicate that economic interdependencies developed in terms of network positions and changes in the network centralities have been pivotal determinants in reorganizing international economies and creating competitive advantages for economic growth for countries centrally located in the global production networks. Applying difference-of-logs (growth rate) models, the results present robust positive effects of transactional networks on economic growth net of four groups of alternatively hypothesized determinants (dependence, industrialization, human capital investment, and military expenditure). The results indicate that increased transactional linkages with the international economy have been beneficial rather than harmful to economic growth. I conclude that structural position in external transaction networks has been the critical factor affecting growth and transformation in the world economy.