How Does Economic Development in Eastern Europe Affect Austria's Regions? A Multiregional General Equilibrium Framework

The paper quantifies regional welfare effects arising from the increasing trade flows between Austria and its Eastern neighbors after the opening up of Eastern Europe. We calibrate a static multiregional Computable General Equilibrium (CGE) model with benchmark data from 1994 for Austria, subdivided into nine Federal Provinces. The regions are linked by trade flows with the four Eastern neighboring countries and with the rest of the world. We simulate the effects of the increase of trade interpenetration as observed between 1989 and 1999 in a comparative static analysis. Regional welfare effects under fixed and flexible wages are presented. We also compare national CGE results with estimates obtained in a simple partial equilibrium approach.     

ECONOMIC GEOGRAPHY OF FIRMS AND SKILLED LABOR*

ABSTRACT This paper investigates the relationship between firm location and skilled‐labor location. While existing new economic geography (NEG) models could not explicitly analyze the relationship due to their assumptions, I construct a new NEG‐type model allowing for different location dynamics of firms and skilled labor for this objective. The main results are as follows. First, a relatively large pool of skilled labor attracts firms when trade costs are small, while it might repel firms when trade costs are sufficiently large. Second, assuming that skilled workers are mobile between regions, the model shows that skilled workers agglomerate faster than firms with decreasing trade costs. Third, the model supports the hypothesis that firms follow skilled labor rather than the reverse. These results are consistent to Indian and Chinese experiences, and some “creative‐class” or “skilled‐city” stories.     

The Impact of a Customs Union with the European Union on Internal Migration in Turkey

Abstract The impact of the recent Customs Union (CU) agreement between Turkey and the European Union on internal migration is studied using an intra‐industry trade Computable General Equilibrium (CGE) model with intersectoral capital mobility under two alternative specifications for the labor market: the traditional Harris‐Todaro approach and the existence of a “wage curve” in the urban sector. Under both specifications, the numerical results show that the CU is welfare enhancing and causes a reduction of the urban‐rural wage gap as suggested by theoretical studies. At the same time, it leads to rural‐to‐urban migration and raises the capital rent, results that are counter intuitive with respect to the dual economy literature. Furthermore, the rise in formal labor demand and the migration response to the CU have not resulted in an increase in urban unemployment (i.e. the “Todaro paradox”), but rather to a fall in the unemployment pool. The study also shows that the Bhagwati‐Srinivasan proposal of maximizing welfare by uniformly subsidizing the entire labor market is impracticable, especially if the high wage union sector can negotiate employment conditions.     

The Geographic Effects of Trade Liberalization with Increasing Returns in Transportation

Abstract This paper develops a model of economic geography that examines how the distribution of economic activity may change as a country opens up to foreign trade. The distinctive features of the model are that transportation is costly between locations within a nation as well as between nations, and that these transportation costs are subject to increasing returns to scale. A result of the model is that trade liberalization may cause the population of a country to become more concentrated in a single megalopolis. The large megalopolis may reduce welfare due to congestion costs, which implies that liberalization may unexpectedly leave the country worse off.     

GLOBALIZING KNOWLEDGE: HOW TECHNOLOGICAL OPENNESS AFFECTS OUTPUT,SPATIAL INEQUALITY,AND WELFARE LEVELS

Using an analytically solvable model, we study how the spatial distribution of economic activities and the ensuing welfare levels are affected by pecuniary externalities, depending on transportation costs, and localized technological externalities, due to the cost saving effect of intra‐ and interregional knowledge spillovers. Under the assumption of capital mobility and labor immobility, we show that increasing interregional knowledge spillovers, i.e., promoting technological openness, favors a smoother transition between different levels of firms concentration, makes trade globalization less likely to generate catastrophic and irreversible agglomeration, and ultimately leads to a less uneven distribution of welfare.     

LOCAL FOOD,URBANIZATION, AND TRANSPORT‐RELATED GREENHOUSE GAS EMISSIONS

We argue that “buying local” does not necessarily reduce transport‐related greenhouse gas emissions, even if production technologies and yields are homogeneous in space. We develop a partial‐equilibrium model of rural‐urban systems where the spatial distribution of food production within and between regions is endogenous. We exhibit cases where locating some food production in the least‐urbanized regions results in lower emissions and higher welfare than if all regions are self‐sufficient. The optimal spatial allocation of food production does not exclude the possibility that some regions should be self‐sufficient, provided that their urban population sizes are neither too large nor too small.     

SPATIAL SCOPE OF A MODERN TRANSPORT TECHNOLOGY

This paper studies the endogenous choice of transport technology, “traditional” versus “modern,” by a shipper. Although the “modern” technology is characterized by higher fixed costs and a higher speed of transport, it is chosen for intermediate distances, rather than to long distances. The reason is that, when the shipper switches to the “modern” technology, the industrial firm changes production from the home to the foreign city. Thus, the demand for transport decreases proportionally to the distance between the home and foreign city. For long distances, revenue from transportation becomes so low that the “modern” technology does not break even.     

Modeling Regional Economic Resilience to Disasters: A Computable General Equilibrium Analysis of Water Service Disruptions*

Abstract. Recent natural and manmade disasters have had significant regional economic impacts. These effects have been muted, however, by the resilience of individual businesses and of regional markets, which refers to the inherent ability and adaptive responses that enable firms and regions to avoid potential losses. Computable general equilibrium (CGE) analysis is a promising approach to disaster impact analysis because it is able to model the behavioral response to input shortages and changing market conditions. However, without further refinement, CGE models, as well as nearly all other economic models, reflect only “business‐as‐usual” conditions, when they are based on historical data. This paper advances the CGE analysis of major supply disruptions of critical inputs by: specifying operational definitions of individual business and regional macroeconomic resilience, linking production function parameters to various types of producer adaptations in emergencies, developing algorithms for recalibrating production functions to empirical or simulation data, and decomposing partial and general equilibrium responses. We illustrate some of these contributions in a case study of the sectoral and regional economic impacts of a disruption to the Portland Metropolitan Water System in the aftermath of a major earthquake.     

Welfare Convergence,Bureaucracy, and Moral Distancing at the Food Bank

This paper seeks to extend geographic thinking on the changing constitution of the UK welfare state, suggesting the need to supplement ideas of the “shadow state” with an analysis of the blurring of the bureaucratic practices through which welfare is now delivered by public, private and third sector providers alike. Focusing on the growing convergence of the bureaucratic practices of benefits officials and food bank organisations, we interrogate the production of moral distance that characterise both. We reveal the ideological values embedded in voucher and referral systems used by many food banks, and the ways in which these systems further stigmatise and exclude people in need of support. Contrasting these practices with those of a variety of “ethical insurgents”, we suggest that food banks are sites of both the further cementing and of challenge to the injustices of Britain's new welfare apparatus.     

AGGLOMERATION,TRADE, AND SPATIAL DEVELOPMENT: BRINGING DYNAMICS BACK IN*

ABSTRACT The field of spatial economics has made enormous progress in theorizing and measuring agglomeration effects, trade costs, and urbanization. Typical models establish structural determinants by making strong assumptions about which forces are relevant and how these forces interact. But many of these assumptions, about firms, agents, spatial costs, and market structures, are questionable. As a result, the field has a long way to go to establish causality, and to be able to account for spatial economic dynamics.     

国内区域贸易、国际贸易与国家竞争力

大国国内区域贸易与国际贸易关系主要表现在两个方面:一是国内区域贸易与国际贸易存在一定程度上的相互替代的关系;二是国内区域贸易与国际贸易存在相互促进的关系,发展国内区域贸易能提升大国在国际经济中的竞争力。     

A Spatial Price Determination Model for Multi‐Market Heterogeneously Distributed Resources: An Application to Forestry Markets in Sweden

The spatial dimension is a key paradigm in price determination, as attested by recent studies in the literature that highlighted the differential in market behavior between spatial and non‐spatial pricing settings. In this paper, we develop a model of spatial pricing for multi‐market heterogeneously distributed resources, with an application to the Swedish forestry sector. The focus of the model is to estimate the impact of spatial interaction on the demand for resources in terms of resource allocation, competition, and pricing. In its core, the pricing mechanism relies on a supply–demand framework. Using disaggregated data at the gridcell level for forest feedstock supply and harvesting costs in Sweden, we construct regional supply curves for each gridcell assuming a maximum transportation distance to delimit the potential market. Demand nodes are exogenously determined and are adjusted using a distance‐decay model to assess demand pressure across locations. We apply the model empirically to assess the impact on forest feedstock prices of a 20 TWh increase in biofuel production.     

Elementary Spatial Systems of Industrial Production

An elementary spatial system of industrial production is conceptualized as the primary geographical formation in industry. Such an elementary production system (EPS) is viewed as consisting of raw-material and consumption nodes connected by lines of movement with a single production node. Besides the measures proposed by Kansky (University of Chicago, Research Paper 84, 1963), such a system, represented in the form of a connected, directed graph, can be described by measures of material and spatial transformation and by indices of dispersion of aggregate nodes. Characteristic properties of EPS are the spatial attraction between nodes and the spatial coincidence and intersection of common nodes of two or more systems. The usual Weberian movement-minimization approach to the building of a model of such an elementary production system is judged to be inadequate because it ignores local differences in production costs, and a “field of potential costs” is proposed instead to take account of the total cost picture.     

THE SPATIAL MONOPSONY: A THEORETICAL ANALYSIS*

ABSTRACT. In this paper some of the most important properties of the behavior of a spatial monopsonist are derived. Many results are mirror images of corresponding results for the spatial monopolist. A few results are, however, genuinely new. A lot of effort is spent in comparing the properties of the profit function under three different pricing policies, f.o.b. (mill)-pricing, uniform delivered pricing, and spatial price discrimination. It is shown, for example, how the profitability and welfare consequences of the different policies are related to the shapes of the supply and demand functions. It is argued that the theory may have important applications in economic analyses of renewable natural resources such as forests, where total transportation costs are nonnegligible.     

Contextualizing Welfare's Work Disincentive: The Case of Female-headed Family Poverty

The conventional model of the relationship between welfare incentives and poverty rates holds that welfare payments produce an income-enhancement effect that removes families from poverty until some threshold. Beyond this point increased payments engender a work-disincentive effect resulting in increased rates of poverty. We challenge the model's assumption that poverty levels are a simple and spatially invariant response to welfare incentives, contending instead that local employment conditions may substantially alter the relation. Our reformulation of the conventional modeling approach is based on the expansion method. Specifically, we extend the model to include the effects of local labor-market conditions on the response of poverty levels to welfare incentives. In contesting the invariance assumption, the expansion method allows us to determine where and in what contexts welfare is “work discouraging.” The empirical analysis, which is undertaken at the county level, indicates that welfare payments vary in their influence on poverty rates across different employment contexts. A national map portraying this parameter instability demonstrates that female-family poverty rates are most responsive to welfare assistance in the rural South and least responsive in the metropolitan Northeast. Finally, we examine two sharply contrasting locales to illustrate how poverty is governed by specific employment and welfare characteristics.     

Policy Coalitions in the U.S. Congress: A Spatial Duration Modeling Approach

This paper applies spatial duration models to the analysis of cosponsorship coalitions in the U.S. House of Representatives. This approach provides a unique and simultaneous statistical analysis of ideological space (specifically, coalition formation) and geographical space. Typically, duration models are associated with temporal longitudinal data, but recently have been adapted to the spatial domain (Pellegrini and Reader 1996). In this paper, spatial duration models are further adapted to examine ideological space including a consideration of unobserved sources of spatial variation (or omitted variable bias). We examine two features of cosponsorship coalitions, breadth and clustering. Breadth is defined as the ideological distance between the two most extreme members of the coalition which is an important “signal” to the rest of Congress regarding the scope and broad appeal of the proposed legislation. In contrast, clustering refers to the distance between individual members of a coalition and reveals the tendency, or not, of ideologically similar members of Congress to support various bills. To examine breadth and clustering, we employ spatial duration models of cosponsorship that permit a multivariate analysis incorporating both the characteristics of members of Congress and the geographical regions they represent. Results indicate that cosponsorship coalition patterns are primarily determined by the content of the legislation, not the actions of the coalition leadership. While the leadership characteristics of sponsors have a limited effect on cosponsorship breadth, the size of the coalition is the primary determinent. Leadership characteristics also have little effect on cosponsorship clustering. Rather, clustering is due to members' policy preferences, as measured by distance to the coalition leader. In addition, the duration analysis results suggest that geographical proximity between members of Congress “overcomes” ideological distance. Finally, the spatial duration approach is noted as a fruitful methodology for examining explicitly spatial patterns in both ideological or geographical space.     

7. SPACES,PLACES, AND THE HISTORIANS: A COMMENT FROM A GERMAN PERSPECTIVE

This article discusses from a specifically German point of view the “spatial turn” in history and the approaches of this forum. Many recent interventions have suggested that “space” (as opposed to “time”) was for many years a marginalized category in the German historiographical debate because of the ideological contamination of the category “space” by the Nazis. In the context of the vivid, lively “provincial” or “regional” history practiced in Germany, however, “space” has always played an important role. The debates around the spatial turn nevertheless provide the opportunity for deliberate reconceptualization. This comment proposes a relational understanding of “space” as the core of the new approach and identifies some central elements and terms for it: the differentiation of “spaces,”“places,” and “locations”; movement in space; the division of space in the form of boundaries; finally, the ordering and classification of space in the form of written or visual representations.     

Determinants of Variation in Population–Employment Interaction Findings: A Quasi‐Experimental Meta‐Analysis. 人口‐就业相互作用的决定因素研究：一种准实验元分析法

This article reports about a metaregression analysis of empirical results generated using data for the northern Netherlands (1988–2002) in order to investigate the ambiguity in results in the population–employment interaction literature. Specifically, the analysis deals with the issue whether “jobs follow people” or “people follow jobs.” The article starts with introducing the basics of quasi‐experimental meta‐analysis and with identifying some advantages of using quasi‐experimental meta‐analysis as compared with the standard meta‐analysis approach. Two subsequent sections document the selection of the population–employment interaction model and salient characteristics of the data set as well as the setup of the primary analyses. A total of 4,050 quasi‐experimental empirical results for the jobs–people direction of causality are generated using different specifications and estimators for a spatial econometric interaction model. The subsequent metaregression analysis reveals that the empirical results are largely shaped by the spatial, temporal, and employment characteristics of the data sampling. The results also appear much more sensitive to different measurements of the model's key variables when compared with alternative specifications of the spatial weights matrix. The main determinant driving empirical results about jobs–people causality are differences in model specification and estimation, as revealed by an inherent bias in parameter estimates and misguided inferences for some of the commonly used specifications. Finally, suggestions for future research are identified.     

Peripheralization: Theoretical Concepts Explaining Socio-Spatial Inequalities

The current increase in socio-spatial inequalities in Europe has led to a revival of the terms “peripheralization” and “marginalization” in spatial research. In contrast to the geographical notion of a “periphery”, which is synonymous with distance to a centre and being situated on the fringes of a city, region or nation, research on “peripheralization” describes the production of peripheries through social relations and their spatial implications. The main part of the article provides a critical review of theoretical concepts which attempt to explain socio-spatial disparities between centralization and peripheralization processes. This includes theories of economic polarization, social inequality and political power. Building on this, a multidimensional concept of socio-spatial polarization is outlined, one which comprises processes of centralization and peripheralization in economic, social and political dimensions. Finally, implications are drawn for spatial planning regarding the polarization between metropolitan and non-metropolitan regions and areas for further research are highlighted.     

The ripple effects of large-scale transport infrastructure investment

We analyze the general equilibrium effects of an asymmetric decrease in transport costs, combining a large-scale spatial dynamic general equilibrium model for 267 European NUTS-2 regions with a detailed transport model at the level of individual road segments. As a case study, we consider the impact of the road infrastructure investments in Central and Eastern Europe of the European Cohesion Policy. Our analysis suggests that the decrease in transportation costs benefits the targeted regions via substantial increases in gross domestic product (GDP) and welfare compared to the baseline, and a small increase in population. The geographic information embedded in the transport model leads to relatively large predicted benefits in peripheral countries such as Greece and Finland, which hardly receive funds, but whose trade links cross Central and Eastern Europe, generating profit from the investments there. The richer, Western European nontargeted regions also enjoy a higher GDP after the investment in the East, but these effects are smaller. Thus, the policy reduces interregional disparities. There are rippled patterns in the predicted policy spillovers. In nontargeted countries, regions trading more intensely with regions where the investment is taking place on average benefit more compared to other regions within the same country, but also compared to neighboring regions across an international border. We uncover that regions importing goods from Central and Eastern Europe enjoy the largest spillovers. These regions become more competitive and expand exports, to the detriment of other regions in the same country.