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Abstract: We monetize the cost for moving to a culturally different location. We combine administrative social security panel data with a proxy for cultural difference based on historical dialect dissimilarity between German counties. Conditional on geographic distance and pre‐migration wage profiles, we find that migrants demand a (indexed with respect to local rents) wage premium of about 1 (1.5) per cent for overcoming one standard deviation in cultural dissimilarity. The effect is driven by males and those who earn above average occupational wages before migration, and more pronounced for geographically short moves. [ABSTRACT FROM AUTHOR]

This paper explores the determinants of religious giving through simulations, economic theory, and survey data. Skewness, a distinctive yet poorly understood feature of religious giving, proves to be an inevitable consequence of the weak correlation between absolute levels of income and percentage rates of giving. The weak correlation can be derived, in turn, from a formal, rational choice model of religious participation. Data from the General Social Surveys show that this model also accounts for many other observed patterns in giving and church attendance. [ABSTRACT FROM AUTHOR]

Economists today play prominent roles in formulating antitrust policy and litigating antitrust cases. This paper explains why economics influences antitrust law and describes how economic theories enter and shape the antitrust system. Antitrust policy and doctrine change over time in response to developments in economic theory, and the decentralization of the antitrust adjudication system and the wide latitude accorded judges in interpreting antitrust statutes ensure that legal rules will reflect advances in the economic literature concerning the appropriate content of standards governing business conduct. [ABSTRACT FROM AUTHOR]

The economic achievements of medieval monasticism have evoked the paradoxical connection between religious asceticism and capitalism central to Weber's famous analysis of the 'Protestant ethic'. It will be argued, however, that focusing on the resemblances to the 'Protestant Ethic' and/or capitalism makes for a partial and distorted picture of the monastic economy and does not render the full impact of monasticism upon the economic sphere of activity in the medieval West. The first section of this paper examines Weber's own perception of the monastic economy: recognizing its achievements and relative rationality, yet also refusing to see in these any real similitude to the 'Protestant ethic' or the announcement of the capitalistic breakthrough. The second section partly confirms Weber's perception by expanding upon ideological and institutional foundations of the monastic economy which further invalidate the analogy to either capitalism and/or the 'Protestant Ethic', albeit for reasons very different from those advanced by Weber. Shifting away from the overriding concern with economic rationality characteristic of previous discussions -- and incidentally offering an altered perspective on the 'Protestant Ethic' itself -- the third section focuses on monasticism's unintended and indirect contribution to the nascent autonomization of the economic sphere of activity, through the analysis of two ideological processes essentially: depersonification on the one hand, symbolic intensification on the other. [ABSTRACT FROM AUTHOR]

A considerable amount has been written recently on the concept of exploitation, which has extended its meaning beyond Marx's original usage. While the concept has lost its association with the theory of surplus value and ideas about the right of workers to their product, there is still no agreement on how exploitation should be conceptualized. It is in the context of such conceptual debate that this paper brings a historical perspective by focusing on how Adam Ferguson, two and a half centuries ago, anticipated much of the modern reformulation of the concept. Methodologically, this anticipation is not shown by finding vaguely matching quotations from modern and classic works, but follows Foucault and examines the similarity in the meaning of the vocabulary in the context of the different problematics within which they occur. In this regard Ferguson's work has three characteristics which are also to be found in many modern works: exploitation is understood as economic exploitation; it is approached through the notion of human agency; and the discussion of exploitation is integrally linked to an ethical concern about its injustice. Such a historical interest is useful for a number of reasons. First, it augments the conceptual analysis which has so far dominated the debate about the term. Second, it demonstrates part of the origins of some of the modern reformulations of exploitation. Ferguson's work anticipates those writers who perceive exploitation to involve inequality of power and control in the labour process, and to involve situations where skills are not the determinant of economic reward and where workers are denuded, diminished and impoverished. In this respect Ferguson follows those modern writers who tend to merge exploitation with alienation. Finally, a discussion of these particular antecedents of the concept is useful to illustrate the distinctiveness of Ferguson's social thought and to define his major contribution to the development of sociology. [ABSTRACT FROM AUTHOR]

The nations of the industrialized capitalist world are characterized by a tendency to reduce the length of time employees normally spend at work. Through capitalism's long history mercantilists, classicalists, Marxists and marginalists have devoted a great deal of effort to attempting to explain why it is that standard times should tend to change. This paper overviews the major contributions to the debate. Various theories are examined and their emergence and fates placed in an historical context. Marginalism's preference argument which presently dominates the debate is challenged by showing that within Marxism there exists an alternative explanation for this phenomenon which is not based on income but on the innate limitations of human beings. Until the 1950s, it is argued, the human limits approach dominated the whole issue of worktime and the essence of this contribution has never been refuted but has been simply deleted from the discussion. Consequently the whole contemporary debate is being conducted on the basis of unjustified assumptions and this is rendering discussion increasingly sterile. [ABSTRACT FROM AUTHOR]

The consumption of natural resources is rapidly emerging as a major social problem, and social efforts to control this consumption are guided in part by research that tries to specify the meaning of resources to consumers. This paper compares a sociological perspective with the more widespread economic model of consumption, using data from study of billing systems, sociocultural status, and household energy use in a California apartment complex. The research suggests that the role of marginal price in ordering consumption can be interpreted as a contingent feature of the socially structured relationship between consumption and social status. It also suggests that the utility of a technology is a secondary and emergent product of its use, a fact obscured by the conventional analytic separation of supply and demand or meansand ends. [ABSTRACT FROM AUTHOR]

The theoretical literature on business cycles proposes numerous causes for their occurrence. This paper attempts to measure the relative importance of aggregate, whether real or nominal, and sectoral factors in generating real economic fluctuations, as well as to identify economic variables that are correlated with the various factors. Empirical results indicate that both aggregate and industry-level factors are statistically significant in explaining variations in output with the aggregate factor being the most important. Some evidence is presented that links the aggregate factor with monetary variables. [ABSTRACT FROM AUTHOR]

Several recent publications have presented evidence suggesting a negative wealth effect in response to federal deficits. This paper investigates the hypothesis that rational economic agents use the legislative process to forecast the future path of federal deficits and then act on that information. A tax legislation variable, included in a reduced form interest rate equation, is tested for significance. The legislative variable that mirrors the effects of current and past deficits is often significant. [ABSTRACT FROM AUTHOR]

This paper predicts an inverted-U relationship between concentration and advertising only for oligopolistic industries facing relatively less elastic demand curves. It rejects the inverted-U theory based on the hypothesis that the large firms collude and lends empirical support to the idea that causation runs from concentration to advertising intensity. By confirming that the effect of advertising on profitability is significant and greater for industries producing homogeneous goods than for those producing heterogeneous goods, this study fails to support the barriers-to-entry hypothesis. [ABSTRACT FROM AUTHOR]

This paper develops a theory of Giffen behavior that results from a second rationing constraint. In contrast to standard analysis, this approach is virtually independent of the specific form of consumer preferences. The effect is first developed in a two-good world along with an example, then extended to a more general case to determine if the effect vanishes as the choice set is expanded. The results demonstrate that Giffen behavior is plausible when a second rationing constraint applies and, furthermore, adding additional goods to the choice set does not necessarily cause the effect to vanish. [ABSTRACT FROM AUTHOR]

This paper develops and estimates a model of the labor supply for overtime work when some workers' choices are constrained by mandatory overtime provisions of employers. Economic incentives are shown to have a significant effect on workers' overtime decisions. Policy simulations suggest that an increase in the overtime premium would lead to greater voluntary overtime work, as would a lowering of the level of weekly hours after which the mandatory premium takes effect. The estimated effects of these changes are not quantitatively large, indicating that workers are fairly insensitive to changes in monetary incentives in making overtime decisions. [ABSTRACT FROM AUTHOR]

Political pressure, or "bashing," by the administration is typically believed to be one way that the administration can coerce an otherwise independent central bank into following the administration's preferred monetary policy path. This paper develops a model for analyzing this type of policy "cooperation" and demonstrates that bashing the central bank creates uncertainty on the part of private agents with regard to future policy actions, which translates into real wage and output variability. Hence, although beneficial to the administration, political pressure creates uncertainty and thus economic instability. [ABSTRACT FROM AUTHOR]

Rational expectations, natural-rate macro-models in which aggregate demand disturbances affect the real sector through price prediction errors, while powerful and tractable analytical tools, are often perceived to be of questionable empirical relevance. This paper reexamines the empirical role of price prediction errors in determining the level of real aggregate activity. The approach is distinguished by accounting for aggregate supply-side disturbances and by more careful treatment of natural rates. Contrary to some previous studies, we find considerable empirical support for the hypothesis that demand-driven price level surprises are positively and significantly correlated with aggregate real economic activity. [ABSTRACT FROM AUTHOR]

The Federal Reserve Board's trade-weighted real exchange rate index is highly correlated with the U.S. defense budget share of GNP. This paper provides evidence that the correlation is not spurious. Political risk associated with holding wealth in the United States varies inversely with U.S. military security and, due to the Soviet military threat to the West, is a major argument in foreign asset demand functions. [ABSTRACT FROM AUTHOR]

This paper investigates the properties of industry equilibrium under price uncertainty given free entry and exit. For any form of risk-averse behavior, it is shown that an increase in demand uncertainty (as measured by a mean-preserving spread) increases mean output price and reduces output of firms in long-run equilibrium. [ABSTRACT FROM AUTHOR]

A popular view among specialists in electric utility economics is that the regulatory process exacerbated the negative effects of the OPEC's oil price increases during the 1970s. In contrast, Peltzman's theory of regulation suggests that regulators should "buffer" a firm from cost increases. This paper examines these contending propositions by examining the stock returns for a sample of electric utilities during the OPEC oil shock of October 1973. The data are more consistent with a buffering effect than a regulatory lag. [ABSTRACT FROM AUTHOR]

The social sciences offer two distinct approaches to understanding society. One originated with the Scottish moral philosophers and shaped the discipline of economics. The other emerged from the French enlightenment and influenced the study of sociology. The two approaches are based on radically different perceptions of man and man's relation to society. This paper explores these alternative hypotheses and examines some major implications. It concludes that the hypothesis reaching back to the Scottish philosophers provides the basis for a unified approach in the social sciences. [ABSTRACT FROM AUTHOR]

In their analysis of corporate pension plans, financial economists typically invoke the simplest and the most tractable model of the labor market. This is the spot model, where the worker's cash wage plus accruing pension benefit equals the value of his marginal product in each and every period. This paper provides evidence against the empirical validity of the spot model, and uses provisions common to most pension plans to do so. These findings are relevant to the appropriate measurement of pension liabilities and thus to the present controversy surrounding the termination of overfunded plans and the recapture of surplus assets by the employer. The existence of incentive effects, ruled out by the spot model, may help to unravel certain well known "puzzles," such as the failure of employers to fully fund their plans in spite of the tax advantages of doing so. [ABSTRACT FROM AUTHOR]

In this paper I suggest that besides Knight's well recognized "uncertainty" explanation of the firm, he had another one. "Moral hazard" is the central feature in the second, largely overlooked theory. I argue, and attempt to document, that this theory is not a chance excursion but is rather quite well developed by Knight. [ABSTRACT FROM AUTHOR]

Do teacher unions affect the cost of public education? Based upon data from two national surveys and holding measures of educational output and other factors constant, the authors of this paper find that teacher unions raise costs by 7 to 15 percent. The estimated differential is not reduced by treating unionization as endogenous, by distinguishing between large and small districts, or by distinguishing between districts in large and small cities. The union effect on cost works through teacher compensation, production technology, and factor use, and is borne primarily by taxpayers, with little or no effect on average student achievement. [ABSTRACT FROM AUTHOR]

This paper briefly examines the causes and consequences of article popularity. Tracing subsequent citations to nearly 6,000 articles published during 1974-76 reveals that most articles are cited rarely, if ever. Over 90% are cited fewer than 20 times over the ensuing 6 years, whereas only 3/10ths of 1% are cited over 100 times. Regression analysis demonstrates that author reputation, article length, and quality of publishing journal are strong determinants of article popularity. The relative importance of various economics journals, though not their rankings, is sensitive to inclusion of "hit" articles; the differential impact of a journal may be more closely approximated by its ability to attract a significant proportion of the "hit parade" of articles. [ABSTRACT FROM AUTHOR]

Introduction: While bio‐behavioural interventions (BIs) for sexually transmitted infections (STIs) and HIV prevention have shown their effectiveness (e.g. treatment for syphilis, HPV vaccination or pre‐exposure prophylaxis [PrEP]), they have also aroused major concerns regarding behavioural changes that could counteract their benefit. Risk compensation (RC) fears concerning BIs in the HIV/STIs prevention field are intimately linked to representations, judgements and social control on sexual behaviour. With an increasing number of PrEP studies describing a rise in STIs due to RC, this paper argues for a shift away from the focus on RC and proposes a more constructive approach to respond to the needs of people living with HIV and populations most at risk. Discussion: The concept of RC, stemming from road safety and derived from economic theory, relies on rational theoretical models of human behaviour. Although widely applied in several contexts its use has been reasonably questioned. Major methodological issues regarding RC have been raised within HIV/AIDS literature. Although behavioural changes (e.g. condomless sex and number of sexual partners) are often erroneously assimilated with RC, there is no evidence that behavioural changes have undermined the effectiveness of previous and current BIs. Still, PrEP has not escaped RC concerns. Increases in condomless sex within the context of growing uptake of PrEP signals a continued need for integrated and innovative HIV and STI prevention strategies and a comprehensive sexual health approach. Routine HIV/STI testing, peer‐led counselling, and identification of sexual health needs within the PrEP model of care could become a gold standard in the sexual health field for all populations. Conclusions: RC remains a frequent argument against the availability and provision of prevention methods for vulnerable populations. Individuals should be able to benefit from the full panel of BIs options available, to find and adapt methods according to their needs. Current, past and future PrEP users, with other stakeholders, may provide valuable insight into innovative solutions and programmes to control HIV and other STIs. [ABSTRACT FROM AUTHOR]

This article presents comments on David W. Orr's research paper on conservation. The authors' offer comments intended to correct disagreements about the parallel sciences of ecology and economics and presents an alternate view on efficiency, ecological bubbles, and conditions for growth. The authors further discuss the appropriate role of science in addressing natural resource problems. The authors also inform that few scientists appreciate the vast economic landscape within ecosystems or realize that ecologists, biologists, and economists study the same phenomena.

Determination of optimal population densities underlies the economic rationality when planning the provision of basic public infrastructure by local governments. Using econometric techniques based on the translog cost function, we investigate the existence of economies of scale, associated to a larger urban size in terms of population and housing, determine the effect of alternative urban patterns - compact or dispersed - on the cost of provision, and calculate optimal population densities as targets for urban planning. We illustrate the practicality of our model using Spanish municipal data, and unveil latent economies of scale and suboptimal urban densities due to excessive dispersion. Based on these findings we propose specific policy guidelines in terms of desirable urban structures. [ABSTRACT FROM AUTHOR]

Starting from the framework proposed by the Millennium Ecosystem Assessment ( MEA) − which conceptually links nature's services with human wellbeing − we design and also apply empirically what we have called the total economic value calculating matrix ( TEVCM) to estimate the monetary value of the annual flow of benefits provided by Chile's national system of protected areas ( NSPA). The calculated economic value of this flow amounts to US$2.55 billion per year. We also analyse the relevance and usefulness of the methodology we propose and use the valuation exercise presented to extract some normative lessons regarding nature conservation in Chile as well as in developing countries rich in natural resource endowments. [ABSTRACT FROM AUTHOR]

Globally, there are few vitamin and mineral ingredient manufacturers. To support local, in‐country or regional procurement and production of multiple micronutrient supplements (MMS), the following production scenarios are possible: (a) straight ingredients of vitamins and minerals forms imported or locally produced that are mixed, tableted, or encapsulated and packaged by a local manufacturer; (b) import or local production of a vitamin and minerals premix that is tableted or encapsulated and packaged locally; (c) import of a bulk, finished product (tablets or capsules) that is packaged and branded; and (d) or import of a branded packaged product. This paper is a situation analysis of the market, manufacturing, and policy factors that are driving the production of MMS in 12 lower and upper middle‐income countries. Key informants completed a self‐administered structured questionnaire, which examined the local context of products available in the market and their cost, regulations and policies, in Brazil, Colombia, Guatemala, Mexico, Peru, Bangladesh, India, Vietnam, Ghana, Kenya, Nigeria, and South Africa. Our study found that although most countries have the capacity to produce locally MMS, the major barriers observed for sustainable and affordable production include (a) poor technical capacity and policies for ensuring quality along the value chain and (b) lack of policy coherence to incentivize local production and lower the manufacture and retail price of MMS. Also, better guidelines and government oversight will be required because not one country had an MMS formulation that matched the globally recommended formulation of the United Nations Multiple Micronutrient Preparation (UNIMMAP). [ABSTRACT FROM AUTHOR]

We determine the properties of the core-periphery model with three regions and compare our results with those of the standard 2-region model. The conditions for the stability of dispersion and concentration are established. As in the 2-region model, dispersion and concentration can be simultaneously stable. We show that the 3-region (2-region) model favours the concentration (dispersion) of economic activity. Furthermore, we provide some results for the n-region model. We show that the stability of concentration of the 2-region model implies that of any model with an even number of regions. Determinamos las propiedades de un modelo núcleo-periferia de tres regiones y comparamos nuestros resultados con los del modelo estándar de dos regiones. Se establecen las condiciones para la estabilidad de la dispersión y la concentración. Al igual que en el modelo de dos regiones, la dispersión y la concentración pueden ser estables simultáneamente. Mostramos que el modelo de tres regiones (dos regiones) favorece la concentración (dispersión) de la actividad económica. Además, aportamos algunos resultados para un modelo n-regional. Mostramos que la estabilidad de la concentración del modelo bi-regional implica eso mismo de cualquier modelo con un número par de regiones. [ABSTRACT FROM AUTHOR]

Trade costs are a crucial element of New Economic Geography (NEG) models. Without trade costs there is no role for geography. In empirical NEG studies the unavailability of direct trade cost data calls for the need to approximate these trade costs by introducing a trade cost function. In doing so, hardly any attention is paid to the (implicit) assumptions and empirical consequences of the particular trade cost function used. Based on a meta-analysis of NEG market access studies as well as on the results of estimating the NEG wage equation for a uniform sample while using different trade costs functions, we show that the relevance of the key NEG variable, market access, depends nontrivially on the choice of trade cost function. Next, we propose an alternative way to approximate trade costs that does not require the specification of a trade cost function, the so called implied trade costs approach. Overall, our results stress that the specification of trade costs can matter a lot for the conclusions reached in any empirical NEG study. We therefore call for a much more careful treatment of trade costs in future empirical NEG studies. [ABSTRACT FROM AUTHOR]

In modern economic growth theory, R&D and the subsequent production of new knowledge are the driving forces for long-term regional growth. Empirical evidence, however, does not always support this popular belief in the regional context. Using a simple growth accounting model, this study examines the role of R&D in regional growth. Estimation results from the proposed models show that knowledge commercialization and retention factors, such as entrepreneurship, university research, human capital, social capital, and industry structure, play significant roles in the regional R&D appropriation mechanism. Findings from this study suggest that R&D policy needs to be designed to take into account other regional factors. [ABSTRACT FROM AUTHOR]

We integrate parking in a simple manner into the basic monocentric model. In equilibrium, the city divides into three zones. Closest to the CBD are parking lots, with residential housing further out. Residents contiguous to the parking lots walk to work. Those in the last band drive to a parking lot and then walk the remaining distance to the CBD. We first assume that parking is unattributed and subject to a common property resource problem. Then the social optimum configuration is identical to the equilibrium when parking lots are monopolistically competitively priced. That is, the optimum is decentralised by private ownership when operators maximise profits under competitive constraints. With attributed parking, the optimum is also attained in equilibrium, and entails higher welfare than unattributed parking. Hemos integrado el aparcamiento de un modo sencillo dentro del modelo monocéntrico básico. En la situación de equilibrio la ciudad se divide en tres zonas. Cerca del centro de la ciudad (CBD -central business district) existen zonas de aparcamiento, mientras que las áreas residenciales están más alejadas. Los residentes contiguos a las zonas de aparcamiento caminan hasta el trabajo. Los de la zona más alejada conducen hasta una zona de aparcamiento y a continuación caminan el resto de la distancia hasta el CBD. Inicialmente se asume que el aparcamiento no está asignado y está sujeto a un problema de recursos de propiedad común. En este caso la configuración óptima social es idéntica a la situación de equilibrio en que el precio de las zonas de aparcamiento está fijado de modo monopolísticamente competitivo. Es decir, el óptimo se encuentra descentralizado en manos privadas en el que los operadores maximizan el beneficio bajo restricciones competitivas. Si el aparcamiento está asignado, el óptimo también se logra en el equilibrio, e implica un mayor bienestar que el aparcamiento no asignado. [ABSTRACT FROM AUTHOR]

The theory of endogenous growth and the geography and growth synthesis both consider that local growth and spatial concentration of economic activities emanate from localised knowledge spillovers ( Lucas 1988 ; Martin and Ottaviano 1999 ). Since the end of the 1980's, the spatial dimension of knowledge diffusion has been investigated from an empirical point of view, and the existence and role of local spillovers has been generally confirmed (see among others Jaffe 1989 ; Audretsch and Feldman 1996 ). The concern that now arises is to unravel the mechanisms underlying and explaining the geographical knowledge spillovers. The aim of this special issue is to present the latest new findings on such questions and to identify some new lines of research for future work. Before presenting the content of this special issue, we very briefly review the main results of the empirical literature on the geography of innovation. We also explain the context of this special issue by pointing out some of the limitations faced by this literature and, by stressing the complex dynamic and network dimensions of the observed processes of production and diffusion of knowledge. [ABSTRACT FROM AUTHOR]

Inter-regional spillover effects are central to China's growth policy; yet relatively little is known about the strength and duration of these spillovers and whether their characteristics have changed over time. This article examines the spillover of output between the three commonly considered regions of China: coastal, central and western regions. We find that there are strong spillovers from the coastal region to both other regions, from the central region to the western region, but that shocks to the western region have no flow-on effect on the other two regions. Thus, a policy of developing the coastal region is likely to indirectly benefit the other two regions. Our results suggest surprisingly little change in the pattern of spillovers over the period 1953–2003, although parameter instability in the beginning of the period limits the extent of possible analysis of this issue. [ABSTRACT FROM AUTHOR]

While cultural events are primarily hosted to enhance, expand and celebrate a certain culture, the economic role that these events play in the host towns are often overlooked. The economic importance stems from the expenditure by attendants that filters through the local economy, stimulating output in the economy. This note makes use of primary data obtained from visitor (demand side) and business (supply side) surveys to determine the local economic impact of the three leading arts festivals in South Africa. The results indicate that the location and size of the town is an important factor in the impact of the event on the town and the region. [ABSTRACT FROM AUTHOR]

This research note demonstrates the advantage of biproportional projection over the ordinary (proportional) method of technical coefficients in input-output analysis: the former is insensitive to price changes, the latter is not so. Consequently, structural change can generally be measured using the biproportional filter on tables in current prices instead of inflation-adjusted matrices, without changing anything in the result. This may be useful when price information and inflation-adjusted matrices are unavailable. The result can be applied to matrix updating. [ABSTRACT FROM AUTHOR]

A test strategy consisting of a two-step Lagrange Multiplier test is suggested as a device to reveal spatial nonstationarity and spurious spatial regression. It is further illustrated how the test strategy can be used as a diagnostic for presence of a spatial cointegrating relationship between two variables. Using Monte Carlo simulations it is shown that the small-sample behaviour of the test strategy is as desired in these cases. [ABSTRACT FROM AUTHOR]

This article examines the distribution of residential property prices in 2001 across local areas in England using spatial econometric methods, showing that spatial variations in local income, income within commuting distance, the stock of residential properties and the quality of local schooling have significant effects. The residual spatial variation due to unknown factors is modelled by a proxy variable, but this does not rule out a significant spatial lag. The article argues that this represents endogenous interaction of property price levels between neighbouring areas, which is interpreted as the outcome of local market knowledge and preference, which produces greater price similarity between an area and its neighbours than one would anticipate from the levels of the exogenous price determinants. [ABSTRACT FROM AUTHOR]

This article presents a theoretical model of the role of intra-regional economies of scale and inter-regional externalities across a three dimensional regional economy. Kubo's (1995) two-dimensional analysis is extended to study the dynamic properties of the development of the three regions. We characterise dynamics and the stability of steady states, and show under what conditions the steady state is unique. Furthermore, we examine different regional development patterns both in cases of symmetric and asymmetric inter-regional externalities. We show that the condition for even regional development in Kubo's model, i.e., that inter-regional externalities are larger than intra-regional economies of scale in each region, is not sufficient for even regional development in a three region model. [ABSTRACT FROM AUTHOR]

This research note reconsiders China’s recent growth experience from an institutional convergence perspective. Based on the neoclassical production function of growth, a stochastic growth model incorporating an institutional variable is specified and estimated using cross-province socioeconomic data for 1984–2001. While three explanatory variables all contribute to growth, the most significant and important effect comes from the variable of institutional progress. This suggests that China’s good economic performance since 1978 can be attributed to the convergence of China’s economic institutions with the economic institutions of modern capitalist economies, particularly the East Asian capitalist economies. If this suggestion is accepted, then China’s newly emerging regionalism can be better understood as resulting from an uneven institutional convergence process in a spatial context. These results are different from those of conventional Chinese regional development studies. They are important because they represent the first detailed evidence on the role of institutional effects in a Chinese regional economic study. [ABSTRACT FROM AUTHOR]

Recent contributions to the regional science literature have considered spatial effects in empirical growth specifications. In the case of spatial dependence, following theoretical arguments from new economic geography, and endogenous growth models, this phenomenon has been associated with the existence of externalities that cross regional borders. However, despite the general consensus that interactions or externalities are likely to be the major source of spatial dependence, they have been modelled in a rather ad hoc manner in most existing empirical studies. In contrast, we advocate basing the analysis on structural growth models which include externalities across economies, applying the appropriate spatial econometrics tools to test for their presence and estimate the magnitude of these externalities in the real world. [ABSTRACT FROM AUTHOR]

In this article we compare two competing approaches to ecological modelling using test data. The first approach is based on the “traditional” method of Ordinary Least Squares (OLS), assuming constancy of parameters across disaggregated spatial units (spatial homogeneity). The second (new) approach is based on the method of Generalised Cross-Entropy (GCE), assuming varying parameters (spatial heterogeneity). The latter approach is designated as entropy-based “distributionally weighted regression” (DWR). The two approaches are tested in a real-world application, using data on per-capita GDP for the 17 regions and some covariates for the 50 provinces of Spain. Specifically, the performances of the two approaches are assessed by examining their capability in tracking the actual per-capita GDP data for the provinces (while treating them as if they were not observed by the econometrician), and in showing evidence of spatial heterogeneity. Our findings indicate that the GCE varying-parameter approach outperforms the OLS approach in terms of predictive power. Specifically, we find that the GCE predictions make efficient use of the lower-level information that is available. In addition, it is shown that entropy-based DWR has some potential as a useful technique for investigating spatially heterogeneous relationships at the lower level of analysis that might otherwise be overlooked. [ABSTRACT FROM AUTHOR]

This article analyses the consequences of spatial interdependence for convergence in a Solow-type growth model. In such a model a region's speed of convergence depends on its location and it can be decomposed into: (i) the speed of convergence proper, (ii) the remoteness effect, and (iii) the impact of the initial gap. Also σ-convergence is affected by spatial interaction and we propose a decomposition to isolate the impact of spatial spillovers. Using GDP per capita of European regions, we calibrate a numerical model with parameters typically found in spatial convergence studies. We find that the remoteness effect leads to considerable variation in the speed of convergence while it marginally affects σ-convergence. [ABSTRACT FROM AUTHOR]

This article provides empirical evidence of interregional risk sharing in unified Germany. The focus is on two related questions. First, to what extent do private institutions and the public sector provide insurance against idiosyncratic shocks to individual regions? Second, to what extent does the public sector reduce long-term differences between regions? While the federal government channel is not found to have a stabilising effect, private capital flows provide almost complete insurance against short-term shocks. In sharp contrast, the fiscal transfer system achieves a substantial reduction of long term disparities between regions. These results show that fiscal transfers in unified Germany are mainly concerned with redistribution in favor of depressed regions rather than providing insurance against idiosyncratic shocks. [ABSTRACT FROM AUTHOR]

A classification of the locational patterns of firms (with economies of scale and scope present) is outlined in order to shed light on the location of the multiplant, multinational firm, which is driven by three forces: spatial economies of scale and scope that follow from the co-location of different activities sharing a common fixed input; transportation costs on the final good; and factor-mobility costs. We conclude that the single-plant firm prevails when spatial economies of scale and scope are pronounced, while multi-plant firms emerge when spatial economies of scale and scope are weak. However, the vertical multinational firm is to be found when transportation costs on the finished good are low, whereas the horizontal multinational firm emerges when these costs are high. The vertical multinational thus appears as the limit in the evolution of the market structure for most consumer goods. [ABSTRACT FROM AUTHOR]

This article describes the impact and influence of the book, Studies in the Economics of Transportation, by M. Beckmann, C.B. McGuire and C.B. Winsten, published in 1956 by Yale University Press. Our focus is on the book's impacts on innovations in modeling, methodological developments and applications in transportation, regional science and other disciplines, which continue to this day. [ABSTRACT FROM AUTHOR]

Several recent studies have highlighted the importance of variation in industry-mix across regions or states in explaining the differential impacts of monetary shocks across those areas. However, the differences between regions in terms of the percentage of total activity accounted for by manufacturing and construction have been decreasing. The logical implication is for the differential impacts of monetary shocks to diminish over time as regions become relatively more similar. This article estimates the state-level impacts of federal funds rate shocks over two sample periods to determine whether the differences in the magnitude of monetary impacts have declined. [ABSTRACT FROM AUTHOR]

With rapid urbanisation, the demand for office floor space also increases. Although high-rise buildings are very common in urban areas, study of the rent for different stories in such buildings is relatively rare. Liu (1988) and Grimaud (1989) separately applied agglomeration economies to study the density variation in urban areas. However, these studies assumed that the floor rent in the same building is the same for each story. Such an assumption about floor rent may not fully reflect actual floor rent and, from the perspectives of theoretical completeness and practical usefulness, formulation for different floor rents in high-rise buildings, and their effect on urban density variation should also be considered. This research note extends Ogawa and Fujita’s locational potential function (1980) into two dimensions: flat dimension and story dimension. The modification of the locational potential function is then applied to revise Liu’s model. Finally, the office distribution in a CBD (central business district) is then discussed. [ABSTRACT FROM AUTHOR]

The aim of this research note is two-fold, firstly, to clarify the growing interaction between regional science and Austrian economics and their awareness of each other. We elucidate the Austrian methodology, called praxeology, which is especially misunderstood in regional science. Secondly, we tentatively sketch a possible contribution of Austrian economics to regional science. The core of the new economic geography is the idea of external economies of scale. Agglomeration of firms often leads to lower costs of existing products, and is a stimulating environment for the invention of new products and the development of new ideas. Austrian economics, which places discovery at the centre of its analysis of the market process, should be able to explain why (public) regional investments may be unsuccessful and why they can be successful. [ABSTRACT FROM AUTHOR]

In this article we discuss the relationships between transportation infrastructure, firm location, agglomeration and regional development. We will argue that the spatial transaction costs faced by modern firms have changed over recent decades, and that this has changed the ways in which transportation infrastructure contributes to form location behaviour and regional economic development. Therefore, in order to analyse these issues, it is necessary to consider the spatial transaction costs faced by modern firms and to investigate the conditions under which reductions in these costs due to infrastructure improvements will allow firms to move. These complex relationships are seen to be mediated via different geography-firm-organisation structures and consideration of these is essential for any realistic evaluation of the role of transportation infrastructure. [ABSTRACT FROM AUTHOR]