TESTING THE SPATIAL SCALE AND THE DYNAMIC STRUCTURE IN REGIONAL MODELS (A CONTRIBUTION TO SPATIAL ECONOMETRIC SPECIFICATION ANALYSIS)*

This article addresses the problem of specification uncertainty in modeling spatial economic theories in stochastic form. It is ascertained that the traditional approach to spatial econometric modeling does not adequately deal with the type and extent of specification uncertainty commonly encountered in spatial economic analyses. Two alternative spatial econometric modeling procedures proposed in the literature are reviewed and shown to be suitable for analyzing systematically two sources of specification uncertainty, viz., the level of aggregation and the spatio-temporal dynamic structure in multiregional econometric models. The usefulness of one of these specification procedures is illustrated by the construction of a simple multiregional model for The Netherlands.     

THE MAXIMUM CAPTURE OR “SPHERE OF INFLUENCE” LOCATION PROBLEM: HOTELLING REVISITED ON A NETWORK*

ABSTRACT. The problem of the ice cream vendor on the beach is extended to the siting of multiple entering servers into the midst of existing servers which are already in place at multiple sites on a network. The network of population nodes, joining arcs, and eligible sites for servers provides the underlying matrix of the problem. The goal of the single firm which is siting the multiple entering servers is the capture of the maximum population from existing servers. This combinatorial problem can be described as a linear integer program for which solutions can easily be derived. Computational experience and insights derived therefrom are reported.     

INTERREGIONAL ARBITRAGE AND THE SUPPLY OF LOANABLE FUNDS: A MODEL OF INTERMEDIATE FINANCIAL CAPITAL MOBILITY*

ABSTRACT This paper develops a model of regional financial markets which can encompass different degrees of spatial financial integration. The behavior of the system is analyzed under alternative assumptions about the time frame of analysis and the extent of the flexibility of interest rates. It is argued that links may exist between regional real and financial sectors even in the short run and that such links must, through the regional balance of payments, exist in the long run, even where there is perfect financial spatial integration. It is observed that these relationships have generally been ignored by regional economic model builders.