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Despite the increasing attention in recent years to the spatial dimensions of economic development, consideration of the importance of space and the recognition that macro, aspatial perspectives can prove to be misleading are not new. Around the world, much of the disappointment with the outcomes from spatial interventions may be traced to a lack of understanding of how regional economies work. This paper reviews the challenges that the consideration of regions brings into economic analysis. This work provides an overview of some of the key methods and tools that can be used to gain a better understanding of how regional economies work. The review aims to guide practitioners and analysts in the use of tools for regional economic analysis and inform discussion of the challenges regions face and the opportunities on which they can build.

The most recent boom in fossil fuel extraction is noteworthy through its extensive use of advanced technologies called hydraulic fracturing and horizontal drilling. The papers in this issue demonstrate the role that regional science can and should play in guiding policy, usefully complementing research from physical science and engineering disciplines that focuses on the important geological and environmental consequences of shale energy production. Furthermore, we underscore the need for expanding the traditional regional science focus in policy discussions pertaining to shale energy.

On the occasion of the 50th anniversary of the SRSA, Jackson sums up what we regional scientists know at this stage in the field’s development.

This study focuses on testing the relationship between income inequality and growth within U.S. counties, and the channels through which such effects are observed. The study tests three hypotheses: (1) income inequality has an inverse relationship with growth; (2) regional growth adjustments are the channels through which the inequality and growth are equilibrated; and (3) income inequality is endogenous to regional growth and its adjustment. Results, based on a system of equations estimation, confirm the hypotheses that income inequality has a growth dampening effect; income inequality is endogenous to regional growth and growth adjustment; and the channels through which income inequality determines growth are regional growth adjustments, such as migration and regional adjustment in job and income growth. Results have numerous policy implications: (1) to the extent that income inequality is endogenous, its equilibrium level can be internally determined within a regional growth process; (2) to the extent that traditional income inequality mitigating policies have indirect effect on overall regional growth, they may have unintended indirect effects on income inequality; and (3) to the extent that regional growth adjustment also equilibrates income inequality, such forces can be utilized as policy instruments to mitigate income inequality, and its growth dampening effects hence forth.

In this paper we develop a spatial panel simultaneous-equations model of business growth, migration behavior, local public services and median household income in a partial lag-adjustment growth-equilibrium framework and utilizing a one-way error component model for the disturbances. This model is an extension of the 'jobs follow people or people follow jobs' literature and it improved previous models in the growth-equilibrium tradition by: (1) explicitly modeling local government and regional income in the growth process; (2) explicitly modeling gross in-migration and gross out-migration separately in order to spell out the differential effects, which used to be glossed over under net population change in previous studies; (3) explicitly incorporating both spatially lagged dependent variables and spatially lagged error terms to account for spatial spillover effects in the data set; and (4) extending and generalizing the modeling and estimation of simultaneous systems of spatially interrelated cross sectional equations into a panel data setting. To estimate the model, we develop a five-step new estimation strategy by generalizing the Generalized Spatial Three-Stage Least Squares (GS3SLS) approach outlined in Kelejian and Prucha (2004) into a panel data setting. The empirical implementation of the model uses county-level data from the 418 Appalachian counties for 1980-2000. Generally, the results from these model estimations are consistent with the theoretical expectations and empirical findings in the equilibrium growth literature and provide support to the basic hypotheses of this study. First, the estimates show the existence of feedback simultaneities among the endogenous variables of the model. Second, the results also show the existence of conditional convergence with respect to the respective endogenous variable of each equation of the model and the speed of adjustment parameters are generally comparable to those in literature. Third, the results from the parameter estimation of the model indicate the existence of spatial autoregressive lag effects and spatial cross-regressive lag effects with respect to the endogenous variables of the model. One of the key conclusions is that sector specific policies should be integrated and harmonized in order to give the desirable outcome. Besides, regionally focusing resources for development policy may yield greater returns than treating all locations the same.

The lack of consistent, reliable data on interregional trade and interindustry transactions hampers complete analysis of regional models. This study implements and tests interindustry transaction flows in a national system of economic regions derived from an interregional accounting framework and initial information on interregional shipments. The method used to construct an interregional Commodity by Industry Flow matrix for the United States involves the construction of single-state SAMs. The interregional flows connecting states are estimated using a method based on the Commodity Flow Survey data published by the Bureau of Transportation Statistics, which adjusts the estimated interregional SAM to insure the integrity of intraregional and system-wide, national accounts. This paper presents the results of exercises testing the validity of the resulting interregional trade-flow data using, among other data sources, the CFS itself, the FAFD and S&P/DRI regional estimates. The model is tested is a US interregional framework describing flows within and among the 50 states and the District of Colombia.

This study investigates demographic change and income inequalities, and relationship between economic growth and income inequality in West Virginia. Income growth was positively related with population and employment growth, but is significantly and negatively related with income inequality. This indicates that higher income inequality is associated with slower economic growth.

In OLS and 2SLS regression analysis a positive relationship exists between small business and economic growth. A strong inverse relationship also exists between the incidence of poverty and small business and economic growth. Thus, the empirical result establishes the linkage between small business, economic growth and the incidence of poverty