INTRODUCTION: PROCESSES OF CHANGE IN URBAN SYSTEMS*

ABSTRACT The twenty‐first century will be one of intensified urbanization, on a scale never before experienced. How do urban systems and individual cities change and develop? The social sciences have many different approaches to analyzing the economic, social, and spatial dimensions of urban change. We inventory some of these approaches and their implications for public policy toward cities, urban change, and economic development.     

Agglomeration and growth: a dialogue between economists and geographers

This special issue contains papers by both economists and geographerson agglomeration and growth. In this introduction, we firstprovide a brief sketch of recent developments in the interactionbetween economists and geographers. We then propose some contextualbackground to make it easier for geographers to approach theeconomics papers of this issue and conversely. Finally, specificareas of overlapping interests to the two disciplines are alsohighlighted.     

The territorial dynamics of innovation: a Europe United States comparative analysis

The United States and European Union differ significantly interms of their innovative capacity: the former have been ableto gain and maintain world leadership in innovation and technologywhile the latter continues to lag. Notwithstanding the magnitudeof this innovation gap and the political emphasis placed uponit on both sides of the Atlantic, very little systematic comparativeanalysis has been carried out on its causes. The empirical literaturehas emphasized the structural differences between the two continentsin the quantity and quality of the major ‘inputs’to innovation: R&D investments and human capital. The verydifferent spatial organization of innovative activities in theEU and the US—as suggested by a variety of contributionsin the field of economic geography—could also influenceinnovative output. This article analyses and compares a wideset of territorial processes that influence innovation in Europeand the United States. The higher mobility of capital, populationand knowledge in the US not only promotes the agglomerationof research activity in specific areas of the country but alsoenables a variety of territorial mechanisms to fully exploitlocal innovative activities and (informational) synergies. Inthe European Union, in contrast, imperfect market integrationand institutional and cultural barriers across the continentprevent innovative agents from maximizing the benefits fromexternal economies and localized interactions, but compensatoryforms of geographical process may be emerging in concert withfurther European integration.     

THE SOURCES OF URBAN DEVELOPMENT: WAGES,HOUSING, AND AMENITY GAPS ACROSS AMERICAN CITIES*

ABSTRACT This paper asks whether worker utility levels—composed of wages, rents, and amenities—are being equalized among American cities. Using microdata on U.S. urban workers in 1980 and 2000, little evidence of equalization is found. Comparable workers earn higher real wages in large cities, where amenities are also concentrated. Moreover, population growth between 1980 and 2000 has not been significantly different in low‐ and high‐utility cities, suggesting that other forces are at work shaping the sorting processes that match workers and firms. We outline an alternative view of the drivers of change in the American urban system, and urban development more generally, by applying theory from economic geography.     

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.     

Trade and the location of industries in the OECD and European Union

Trade and location theory identifies forces that could leadto locational dispersion (comparative advantage) or locationalconcentration (scale economies) in the face of globalizing markets,each with different consequences for specialization and theadjustment costs associated with integration. However, theseforces can play themselves out in very complex ways if locationalchange principally affects intermediate production. Moreover,effects of history may be important, if locational patternswhich exist prior to integration reflect either strong externaleconomies or, as we argue, strong institutionalized capacitiesto respond to more open markets. This could especially be thecase in the context of Europe, whose territories are generallyless specialized than the states of the USA. To see how thesedifferent effects are operating today, empirical measurementis required. Using a data set which allows changes in locationaldistribution of manufacturing industries in the OECD to be measured,we show that Europe does not seem to be ‘Americanizing’its economic geography. Many sectors are actually spreadingout in Europe, implying that the effects of history have remainedstrong up to this point. Specialization increases are weak inmost European economies as well. The OECD has a more complexpicture of spread and concentration. Some of the implicationsfor further research on agglomeration, intra-industry trade,and integration are brought out in the conclusion.