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Shifts in economic geography and their causes

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Anthony J. Venables

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Abstract

Recent decades have seen momentous changes in the economic geography of the world. Political transitions and economic liberalization have brought formerly closed countries into the world economy. Such changes have challenged our understanding of the location of economic activity and of the determinants of changes in the pattern of location. ; In a presentation at the Federal Reserve Bank of Kansas City’s 2006 economic symposium, “The New Economic Geography: Effects and Policy Implications,” Venables explored how a new economic geography perspective provides a number of additional insights into existing patterns of activity and into the forces driving future changes. ; His discussion focused on three key propositions. First, proximity to other economic agents—workers, consumers, and firms—is good for productivity. Second, large income disparities are a perfectly natural outcome of a world in which proximity matters. And, third, the effects of increased trade are potentially ambiguous—there are circumstances in which cheaper spatial interactions cause inequality, not convergence.

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Article provided by Federal Reserve Bank of Kansas City in its journal Economic Review.

Volume (Year): (2006)
Issue (Month): Q IV ()
Pages: 61-85
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Handle: RePEc:fip:fedker:y:2006:i:qiv:p:61-85:n:v.91no.4

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Keywords: Economic conditions;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Hummels, David, 2001. "Time as a Trade Barrier," GTAP Working Papers 1152, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University. [Downloadable!]
  2. Rodrik, Dani, 2004. "Industrial Policy for the Twenty-First Century," Working Paper Series rwp04-047, Harvard University, John F. Kennedy School of Government. [Downloadable!]
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  3. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-59, December. [Downloadable!] (restricted)
  4. Matouschek, Niko & Robert-Nicoud, Frederic, 2005. "The role of human capital investments in the location decision of firms," Regional Science and Urban Economics, Elsevier, vol. 35(5), pages 570-583, September. [Downloadable!] (restricted)
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  5. Giles Duranton & Diego Puga, 2003. "Micro-Foundations of Urban Agglomeration Economies," NBER Working Papers 9931, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," NBER Working Papers 10480, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  7. Krugman, Paul R & Venables, Anthony J, 1995. "Globalization and the Inequality of Nations," The Quarterly Journal of Economics, MIT Press, vol. 110(4), pages 857-80, November. [Downloadable!] (restricted)
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  8. Wheaton, William C & Shishido, Hisanobu, 1981. "Urban Concentration, Agglomeration Economies, and the Level of Economic Development," Economic Development and Cultural Change, University of Chicago Press, vol. 30(1), pages 17-30, October.
  9. Jaffe, Adam B & Trajtenberg, Manuel & Henderson, Rebecca, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 577-98, August. [Downloadable!] (restricted)
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  10. Redding, Stephen & Venables, Anthony J., 2004. "Economic geography and international inequality," Journal of International Economics, Elsevier, vol. 62(1), pages 53-82, January. [Downloadable!] (restricted)
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  11. Gene M. Grossman & Esteban Rossi-Hansberg, 2006. "The rise of offshoring: it's not wine for cloth anymore," Proceedings, Federal Reserve Bank of Kansas City, pages 59-102. [Downloadable!]
  12. Jeffrey A. Frankel & David Romer, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June. [Downloadable!] (restricted)
  13. Hausmann, Ricardo & Rodrik, Dani, 2003. "Economic development as self-discovery," Journal of Development Economics, Elsevier, vol. 72(2), pages 603-633, December. [Downloadable!] (restricted)
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  14. Harrigan, James & Venables, Anthony J., 2006. "Timeliness and agglomeration," Journal of Urban Economics, Elsevier, vol. 59(2), pages 300-316, March. [Downloadable!] (restricted)
  15. Yeats, Alexander J., 1998. "Just how big is global production sharing?," Policy Research Working Paper Series 1871, The World Bank. [Downloadable!]
  16. Henderson, Vernon, 2000. "How urban concentration affects economic growth," Policy Research Working Paper Series 2326, The World Bank. [Downloadable!]
  17. Rosenthal, Stuart S. & Strange, William C., 2004. "Evidence on the nature and sources of agglomeration economies," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 49, pages 2119-2171 Elsevier. [Downloadable!] (restricted)
  18. Rice, Patricia & Venables, Anthony J. & Patacchini, Eleonora, 2006. "Spatial determinants of productivity: Analysis for the regions of Great Britain," Regional Science and Urban Economics, Elsevier, vol. 36(6), pages 727-752, November. [Downloadable!] (restricted)
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  19. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476.
  20. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June. [Downloadable!] (restricted)
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Daniela Marconi & Valeria Rolli, 2007. "Comparative advantage patterns and domestic determinants in emerging countries: an analysis with a focus on technology," Temi di discussione (Economic working papers) 638, Bank of Italy, Economic Research Department. [Downloadable!]
    Other versions:
  2. Nicholas Oulton, 2007. "Chain Indices of the Cost of Living and the Path-Dependence Problem: An Empirical Solution," CEP Discussion Papers dp0797, Centre for Economic Performance, LSE. [Downloadable!]
    Other versions:
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