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European Urban Growth: now for some problems of spaceless and weightless econometrics

  • Stefano Magrini

    ()

    (Department of Economics, University Of Venice Ca’ Foscari)

  • Paul Cheshire

    (Department of Geography and Environment, London School of Economics)

This paper investigates growth differences in the urban system of the EU12 for a data set relating to Functional Urban Regions comparing the results of ‘artisanal’ methods of model selection with those obtained using general to specific model selection with PcGets. The artisanal approach tests hypotheses relating to the role of human capital, EU integration and fragmentation of urban government. The paper also explores issues of spatial dependence and mechanisms of spatial interaction. Using PcGets as suggested by Hendry and Krolzig (2004) to optimise model selection we find that while PcGets provides a powerful tool for model selection when applied to cross sectional data, caution is necessary to ensure that variables relating to spatial adjustment processes are included and spatial dependence is avoided. More generally, not only do the results provide consistent estimates of parameters but they also support relevant theoretical insights. Finally careful testing for spatial dependence reveals that national borders are still significant barriers to adjustment within the EU.

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File URL: http://www.unive.it/media/allegato/DIP/Economia/Working_papers/Working_papers_2006/WP_DSE_Cheshire_Magrini_23_06.pdf
File Function: First version, 2006
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Paper provided by Department of Economics, University of Venice "Ca' Foscari" in its series Working Papers with number 2006_23.

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Length: 44 pages
Date of creation: 2006
Date of revision:
Handle: RePEc:ven:wpaper:2006_23
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  1. Robert J. Barro, 1995. "Inflation and Economic Growth," NBER Working Papers 5326, National Bureau of Economic Research, Inc.
  2. David F. Hendry & Hans-Martin Krolzig, 2004. "We Ran One Regression," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 66(5), pages 799-810, December.
  3. Wallace E. Oates, 1999. "An Essay on Fiscal Federalism," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1120-1149, September.
  4. Florax, Raymond J. G. M. & Folmer, Hendrik & Rey, Sergio J., 2003. "Specification searches in spatial econometrics: the relevance of Hendry's methodology," Regional Science and Urban Economics, Elsevier, vol. 33(5), pages 557-579, September.
  5. Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S103-26, October.
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  7. Paul Cheshire & Stefano Magrini, 2005. "Population Growth in European Cities - Weather Matters, but only Nationally," ERSA conference papers ersa05p12, European Regional Science Association.
  8. Andrés Rodríguez-Pose & Ugo Fratesi, 2003. "Between development and social policies: the impact of European Structural Funds in Objective 1 Regions," European Economy Group Working Papers 28, European Economy Group.
  9. Glaeser, Edward L. & Scheinkman, JoseA. & Shleifer, Andrei, 1995. "Economic growth in a cross-section of cities," Journal of Monetary Economics, Elsevier, vol. 36(1), pages 117-143, August.
  10. Gyourko, Joseph & Kahn, Matthew & Tracy, Joseph, 1999. "Quality of life and environmental comparisons," Handbook of Regional and Urban Economics, in: P. C. Cheshire & E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 3, chapter 37, pages 1413-1454 Elsevier.
  11. Durlauf,S.N. & Quah,D.T., 1998. "The new empirics of economic growth," Working papers 3, Wisconsin Madison - Social Systems.
  12. Audretsch, David B, 1998. "Agglomeration and the Location of Innovative Activity," CEPR Discussion Papers 1974, C.E.P.R. Discussion Papers.
  13. Dora L. Costa & Matthew E. Kahn, 1999. "Power Couples: Changes in the Locational Choice of the College Educated, 1940-1990," NBER Working Papers 7109, National Bureau of Economic Research, Inc.
  14. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October.
  15. Jordan Rappaport, 1999. "Local Growth Empirics," CID Working Papers 23, Center for International Development at Harvard University.
  16. Barro, R.J. & Sala-I-Martin, X., 1991. "Convergence Across States and Regions," Papers 629, Yale - Economic Growth Center.
  17. Jonathan Temple, 1999. "The New Growth Evidence," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 112-156, March.
  18. I R Gordon & D Lamont, 1982. "A model of labour-market interdependencies in the London region," Environment and Planning A, Pion Ltd, London, vol. 14(2), pages 237-264, February.
  19. Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1257-78, December.
  20. Magrini, Stefano, 2004. "Regional (di)convergence," 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 62, pages 2741-2796 Elsevier.
  21. Paul Cheshire, 2000. "Endogenous Processes in European Regional Growth: Convergence and Policy," Growth and Change, Wiley Blackwell, vol. 31(4), pages 455-479.
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