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We develop a model of property taxation and characterize equilibria under three alternative taxa-tion regimes often used in the public finance literature: decentralized taxation, centralized taxation, and “rent seeking” regimes. We show that decentralized taxation results in inefficiently high tax rates, whereas centralized taxation yields a common optimal tax rate, and tax rates in the rent-seeking regime can be either inefficiently high or low. We quantify the effects of switching from the observed tax system to the three regimes for Japan and Germany. The decentralized or rent-seeking regime best describes the Japanese tax system, whereas the centralized regime does so for Germany. We also quantify the welfare effects of regime changes.

We construct a dynamic general equilibrium model of housing, incorporating some key features that bridge time and space. We model explicitly the evolution of housing structures/household durables and the separate role played by land, fully accounting for households’ locational choice decisions. Housing services derive positive utility, but are decayed away from the city center. Our model enables a full characterization of the dynamic paths of housing as well as housing and land prices. The model is particularly designed to be calibrated to fit some important stylized facts, including faster growth of housing structure/household durables than housing, faster growth of land prices than housing prices, a locationally steeper land rent gradient than the housing price gradient, and relatively flatter housing quantity and price gradients in larger cities with flatter population gradients. The calibrated model is then used to quantitatively assess the dynamic and spatial consequences of demand and supply shifts. We find that nonhomotheticity in forms of income-elastic spending on housing/household durables and minimum structure requirement in housing production are essential ingredients.

This paper uses historical monthly temperature level data for a panel of 114 countries to identify the effects of within year temperature level variability on productivity growth in five different macro regions, i.e., (1) Africa, (2) Asia, (3) Europe, (4) North America and (5) South America. We find two primary results. First, higher intra-annual temperature variability reduces (increases) productivity in Europe and North America (Asia). Second, higher intra-annual temperature variability has no significant effects on productivity in Africa and South America. Additional empirical tests indicate also the following: (1) rising intra-annual temperature variability reduces productivity (even thought less significantly)in both tropical and non-tropical regions, (2) inter-annual temperature variability reduces (increases) productivity in North America (Europe) and (3) winter and summer inter-annual temperature variability generates a drop in productivity in both Europe and North America. Taken together, these findings indicate that temperature variability shocks tend to have stronger adverse economic effects among richer economies. In a production economy featuring long-run productivity and temperature volatility shocks, we quantify these negative impacts and find welfare losses of 2.9% (1%) in Europe (North America).

The distribution of transport infrastructure across space is the outcome of deliberate government planning that reflects a desire to unlock the welfare gains from regional economic integration. Yet, despite being one of the oldest government activities, the economic forces shaping the endogenous emergence of infrastructure have not been rigorously studied. This paper provides a stylized analytical framework of open economies in which planners decide non-cooperatively on transport infrastructure investments across continuous space. Allowing for intra- and international trade, the resulting equilibrium investment schedule features underinvestment that turns out particularly severe in border regions and that is amplified by the presence of discrete border costs. In European data, the mechanism explains about a fifth of the border effect identified in a conventionally specified gravity regression. The framework sheds light on the welfare costs of second best investment schedules, on the effects of intercontinental trade or of privatized infrastructure provision.

How large are the benefits of transportation infrastructure projects, and what explains these benefits? To shed new light on these questions, I collect archival data from colonial India and use it to estimate the impact of India's vast railroad network. Guided by six predictions from a general equilibrium trade model, I find that railroads: (1) decreased trade costs and interregional price gaps; (2) increased interregional and international trade; (3) eliminated the responsiveness of local prices to local productivity shocks (but increased the transmission of these shocks between regions); (4) increased the level of real income (but harmed neighboring regions without railroad access); (5) decreased the volatility of real income; and (6), a sufficient statistic for the effect of railroads on welfare in the model accounts for virtually all of the observed reduced-form impact of railroads on real income. I find similar results from an instrumental variable specification, no spurious effects from over 40,000 km of lines that were approved but never built, and tight bounds on the estimated impact of railroads. These results suggest that transportation infrastructure projects can improve welfare significantly, and do so because they allow regions to exploit gains from trade.

This paper investigates second-best congestion pricing in a monocentric city characterized by distortionary, rigid regulatory mechanisms in the housing market (building height restrictions, zoning and property taxation). The Pigouvian toll is shown to retain its optimality under any setting with quantity restrictions in the housing market. However, the extent of the quantity restriction determines the volume of the welfare gains in a non-monotonic fashion. This finding introduces a warning to cost-benefit analyses: our numerical results suggest that the actual gains of a road tax might be 40% lower than the gains predicted by a model that disregards maximum building height restrictions, and 80% higher than the gains suggested by a model that disregards zoning. In general, this implies that decision making on urban road pricing can ignore quantitative restrictions in the related markets of land, housing and labor insofar as the determination of optimal marginal tax rules is concerned; the tax levels stemming from those rules will be affected by the restrictions. However, this is not the case in the presence of a tax-induced distortion. Introducing an ad- valorem property tax on housing, we show that adjustments of the Pigouvian toll can lead to small, but not negligible welfare gains.

We study the impact of regional and sectoral productivity changes on the U.S. economy. To that end, we consider an environment that captures the effects of interregional and intersectoral trade in propagating disaggregated productivity changes at the level of a sector in a given U.S. state to the rest of the economy. The quantitative model we develop features pairwise interregional trade across all 50 U.S. states, 26 traded and non-traded industries, labor as a mobile factor, and structures and land as an immobile factor. We allow for sectoral linkages in the form of an intermediate input structure that matches the U.S. input-output matrix. Using data on trade flows by industry between states, as well as other regional and industry data, we obtain the aggregate, regional and sectoral elasticities of measured TFP, GDP, and employment to regional and sectoral productivity changes. We find that such elasticities can vary significantly depending on the sectors and regions affected and are importantly determined by the spatial structure of the US economy. We highlight the role of these elasticities by tracing out the effects of productivity gains in California in the Computers and Electronics industry between 2002 and 2007 on all other U.S. sectors and regions.

Стаття присвячена вивченню теоретичних джерел та основних критеріїв визначення конкурентоспроможності промислового регіону та розробці рекомендацій щодо управління конкурентоспроможністю промислових регіонів. Сформовано визначення поняття: «конкурентоспроможність регіону» як позиція регіону у національному та міжнародному рейтингу за результатами реалізації його конкурентних переваг, що обумовлені економічними,політичними,соціальними факторами,а також інноваціями. Обґрунтовано, що для виправлення існуючих проблем на регіональному рівні у країні необхідно сформувати стратегії управління конкурентоспроможністю промислових комплексів, основу яких становитиме сукупність методів, способів, важелів та алгоритмів для встановлення довгострокових цілей, які комплексно охоплюють усі сфери діяльності промислових підприємств, ураховують можливі майбутні зміни зовнішнього середовища та циклічність розвитку економіки, тобто необхідно сформувати засіб для реалізації місії підприємств промислового комплексу. Доведено, що на створення та реалізації стратегії управління конкурентоспроможністю підприємств промислового комплексу регіону найбільш всього впливає компетентність вищого рівня менеджменту. У висновках зазначено, що для підвищення ефективності промислових комплексів регіонів необхідно вдосконалювати традиційні методи з управління конкурентоспроможності окремих підприємств у комплексі та впроваджувати новітні стратегії їх розвитку, дивлячись на динамічний розвиток на мінливість українського ринку. The article is devoted to the study of theoretical sources and the main criteria for determining the competitiveness of the industrial region and the development of recommendations for the management of the competitiveness of industrial regions. The definition of the concept: "competitiveness of the region" is formed as the position of the region in the national and international rating on the results of realization of its competitive advantages, which are caused by economic, political, social factors, as well as innovations. It is substantiated that in order to correct existing problems at the regional level in the country it is necessary to form strategies for managing the competitiveness of industrial complexes, which will be based on a set of methods, methods, levers and algorithms for establishing long-term goals that comprehensively cover all areas of activity of industrial enterprises, take into account possible future changes of external environment and cyclical development of the economy, that is, it is necessary to form a means for the implementation of the mission of enterprises of industrial complex. It is proved that the competence of a higher level of management is most affected by the creation and implementation of the strategy of managing the competitiveness of enterprises of the industrial complex of the region. The conclusions state that in order to increase the efficiency of industrial complexes of regions, it is necessary to improve traditional methods of managing the competitiveness of individual enterprises in the complex and to implement the latest strategies for their development, looking at the dynamic development of the volatility of the Ukrainian market. Keywords: regional competitiveness, industrial complexes of regions, management, development strategy, innovations.

Should constraints on urban expansion be relaxed because of external agglomeration economies? In a system of heterogeneous cities, we demonstrate that second-best land use policy consists of a tax on city creation and a subsidy (tax) on urban development in cities in which the marginal-average productivity gap is above (below) average. However, the implementation of this policy requires coordination at the system level. A tax on city creation does not raise welfare if development taxes are set decentrally by competitive urban developers, nor does correction of these taxes raise welfare if a tax on city creation is unavailable. In the resulting constrained optimal allocation, urban development is subsidized in all cities. The quantitative significance of these findings is explored in an application of our model.

Since most municipal-generated revenues (from property taxes, business licenses and vehicle permits) depend on the income earned by local inhabitants and the business or industry within the municipality, it is not surprising that there is a significant asymmetry in the volume and standard of local public goods available in the Chilean territory. Measures such as reducing exemptions from property tax and directly compensating municipalities for the exempt portion aim at neutralizing this asymmetry. They would also broaden the base of taxpayers and increase the accountability of local authorities.

During the last decade most of the European countries started a process of liberalization of gambling with the aim of fighting against illegal gambling and collecting an increasing amount of tax revenues. In this paper, after providing a comparison on main gambling institutional and tax differences across a selection of European countries, we evaluate the impact of gambling on government budget in order to understand if gambling consumption cannibalizes other forms of consumption, making doubtful the net effect for the government revenues. Results of our empirical analysis show that the effect of gambling on state balance is very small and, in some cases, not significant. Considering also the relevant social costs connected to pathological gambling, this result is interesting for policy makers who often consider gambling revenues as a possible alternative source of tax revenues. - Nell’ultimo decennio, la maggior parte dei paesi Europei ha intrapreso un processo di progressiva liberalizzazione del mercato del gioco d’azzardo, allo scopo di disincentivare il gioco illegale e di ottenere un crescente ammontare di entrate erariali. In questo lavoro, dopo aver fornito un confronto sulle principali differenze istituzionali e fiscali all’interno dei paesi UE, sarà valutato l’impatto del gioco sul bilancio dello Stato al fine di comprendere se il gioco d’azzardo cannibalizzi altre forme di consumo rendendo dubbio l’effetto netto per lo Stato. I risultati mostrano come l’impatto del gioco d’azzardo sulle entrate erariali sia molto ridotto e in alcuni casi non significativo. Considerando gli elevati costi sociali connessi al gioco patologico questo risultato può essere di utilità per i decisori pubblici che spesso considerano il gioco d’azzardo come una possibile e importante fonte alternativa di entrate per le casse dello Stato.

We have shown that in order to make a decision regarding the optimal formula for Romania’s regionalization it is necessary to consider more than one criteria. The aim of this paper is to study one of these criteria – the industrial sector. Using instruments provided by Onicescu’s informational statistics we analyze the homogeneity of the Romanian regions regarding two variables, the industrial production index and the turnover value index in industry. We find out that from this point of view regions are not homogeneous, which leads to the conclusion that industry is an aspect that can be considered when deciding on regionalization.

One may believe that it is better to transplant European successful models, such as the Polish model, or other regionalization schemes in the other European countries. I believe the French tradition of our law and our national peculiarities would be more suitable to be considered for regionalization strategy based on creating new rules that will govern this new reform. So I endorse a traditional and temperate view considering phasing the necessary reforms in the medium and long period in which communities are prepared for their effective implementation. But in this paper I intend to present some interesting aspects of the regionalization process in the European Union. What is the future architecture of the EU in relation to development gaps, what can be done to find suitable solutions to the global crisis which is badly affecting regional and local communities? These are legitimate questions, and that is why we are looking to find adequate strategies for political, economic, social and administrative matters. Some countries were able to find good solutions that today make it possible to mitigate the adverse effects through administrative reorganization and a real decentralization, through social and political solidarity.

This paper presents the theoretical specification of the MONASH-MRF model. MONASH-MRF is a multiregional multisectoral model of the Australian economy. Included is a complete documentation of the model's equations, variables and coefficients. The documentation is designed to allow the reader to cross-reference the equation system presented in this paper in ordinary algebra, with the computer implementation of the model in the TABLO language presented in CoPS/IMPACT Preliminary Working Paper No. OP-82.

This paper extends existing research on regional quality of life in Germany by newly estimating the role of region-specific (dis-)amenities in the determination of regional housing rents and wages. Different from previous studies, the empirical analysis draws on functional labor market areas recently delineated by Kosfeld and Werner [Raumf Raumordn (2012) 70: 49-64] rather than administrative jurisdictions, circumventing problems of spatial autocorrelation. Consistent with cross-region spatial equilibrium, the results indicate that labor market area heterogeneity in housing rents and wages is closely related to differences in non-market attributes that affect household utility. The results enable the construction of a comprehensive ranking of regional quality of life which can be directly compared to the findings of previous studies.

Mixed commercial and residential land use is observed in most cities around the world. Despite its ubiquity, urban economic theory is rather silent on the formation of mixed land use. In particular, standard bid rent models typically predict complete segregation of land use. The two main exceptions are Fujita and Ogawa (1982) and Lucas and Rossi-Hansberg (2002), who introduce bid rent models that allow for endogenous business and residential location choice as well as employment agglomeration externalities. These models predict zones that are characterized by a restrictive type of mixed land use, where there are as many residents as jobs at every location. We extend the latter model by introducing a traffic congestion external effect that adds a degree of freedom to the shape of the bid rent curves, and allows them to coincide over contiguous locations in the city where commuting takes place. We show that this combination of congestion and agglomeration externalities leads to a general type of mixed land use zones.

Carbon leakage provides an efficiency argument for differentiated emission prices in favor of emission-intensive and trade-exposed sectors under unilateral climate policy. However, differential emission pricing can be used as a beggar-thy-neighbor policy to exploit terms of trade. Adopting an optimal tax framework, we propose a method to decompose the leakage and terms-of-trade motives for emission price differentiation. We employ our method for the quantitative impact assessment of unilateral climate policy based on empirical data. We find that the leakage motive yields only small efficiency gains compared to uniform emission pricing. Likewise, the terms-of-trade motive has rather limited potential for strategic burden shifting. We conclude that in many cases the simple first-best rule of uniform emission pricing remains a practical guideline for unilateral climate policy design.

In the context of the changes that have occurred in the Romanian society, the public authorities are required to play a coordinating role in providing the framework for a sustainable and balanced development of the national territory, and to ensure the quality of life of the citizens. In order to achieve these goals of social responsibility, the public administration authorities must build and adapt the tools of public territorial action based on their specificity and within the existing legal framework and resources,. Thus, the study shows the national and European context that frames the actions of public administration for what concerns the sustainable territorial development. It analyzes the characteristics of administrative-territorial structures of Romania, highlighting their socio-demographic diversity and the territorial forms of institutional cooperation. The approach of these issues is based in the first instance on an analysis of the European strategic documents in the field, as well as on the national regulations concerning the organization and functioning of public administration and territorial planning. The implementation of decentralization and local public autonomy has led to the capitalization of the local potential of some administrative divisions and caused a competition and a difficult cooperation between them. By analogy with the provisions of the quality standards regarding the responsibilities of the organizations towards customers, the study illustrates and analyzes the responsibilities and limits of public administration authorities in promoting sustainable development, territorial equity and the quality of life for the users of public services, i.e. the community members.

Poverty has been a matter of great academic and political concern for decades. In the recent years, the interest has increased considerably at the European Union level because poverty seems to be a relatively persistent phenomenon and a threat to economic prosperity and social cohesion of the Union. The aim of this paper is to assess and map, for the first time, the distribution of poverty at the NUTS III level in Greece, as well as to evaluate and map the regional impact of the ongoing economic crisis on poverty, by comparing the poverty rates before and during the crisis. For this purpose a Small Area Estimation technique is employed in order to estimate poverty rates at low levels of geographical aggregation. Spatial variation is a relatively neglected dimension of poverty analysis and poverty maps that provide a description of the spatial distribution of welfare and poverty within a country at different spatial levels may be a useful tool for policy-making.

La creación del conocimiento es habitualmente entendida como un vector clave de crecimiento económico. Mientras que la producción de conocimiento y el crecimiento económico han sido estudiados extensamente por separado, pocos estudios han intentado formalizar el mecanismo conectando los dos elementos desde la perspectiva de un modelo de equilibrio general espacial. Para rellenar este vacío, proponemos un modelo de creación de conocimiento aprovechando el modelo CGE multirregional RHOMOLO para la producción endógena de conocimientos y decisiones de inversión a nivel regional. El proceso de innovación se modeliza teniendo en cuenta la interacción entre investigadores, inversores y productores de bienes de consumo. Más en detalle, los investigadores en cada región usan su capital humano junto a activos que incorporan I+D y bienes intermedios para la producción de nuevas ideas, las cuales son mejoradas por la transferencia de conocimientos desde otras regiones. En la siguiente etapa, estas ideas son adquiridas por inversores locales y se combinan en el proceso de generar nuevos activos que incorporan I+D junto al capital humano y bienes intermedios, así aumentando el stock existente después de haber reemplazado la parte obsoleta. Por último, después del pago de los costes fijos de entrada, empresas regionales producen tanto bienes intermedios como bienes de consumo, alquilando capital humano y activos que incorporan I+D, combinándolos junto con un conjunto interregional de bienes intermedios en el proceso de producción, donde la disponibilidad de bienes y servicios públicos influye en su productividad. El modelo ha sido diseñado para ser calibrado con las versiones regionalizadas de matrices de contabilidad social, como son las que se pueden obtener de la base de datos World Input Output., The expansion of knowledge is commonly understood as a key driver of economic growth. Yet, while knowledge production and economic growth have been extensively studied in isolation, few studies have tried to formalise the mechanism connecting the two elements from a spatial general equilibrium perspective. To fill this gap, in this paper we propose a model of knowledge creation building upon the multiregional spatial CGE model RHOMOLO to allow for endogenous knowledge production and investment decisions at the regional level. The innovation process is modelled through the interaction between researchers, investors and final good producers. Specifically, researchers in each region use their human capital together with local R&D-embedded capital and intermediates to produce ideas, enhanced by knowledge spillovers crossing regional borders. These ideas are then purchased by local investors and combined with their human capital and intermediate goods to be turned into new R&D-embedded capital, which adds up to the existing stock after having replaced the obsolete one. Lastly, after having paid a fixed entry cost, in each region firms produce goods for final and intermediate consumption by renting local R&D-embedded and human capital and combining it with an interregional bundle of intermediate goods, their productivity being enhanced by the availability of local public goods and services. The model is designed to be calibrated using a regionalised version of standard Social Accounting Matrices, such as the ones provided by the World Input Output Database.

One of the instruments of regional management of retail trade networks on this stage of development in the world economy, in our opinion, there is franchising. Actuality of his implantation in a regional economy consists in that franchising can execute the row of such important functions, as development of regional enterprise, creation of workplaces, increase of tax payment in local budgets, stimulation of development of regional producers, including of various industries to the economic clusters of a region.

La política de cohesión es la segunda más importante en el presupuesto de la Unión Europea y es una de las políticas más evaluadas. Existen diferentes herramientas y metodologías para realizar esta evaluación, cada una de ellas con sus propios méritos pero también con sus sesgos y fallos. Este número especial explora las tres aproximaciones más importantes para evaluar la política de cohesión, evaluación fundamentada en la teoría, análisis counterfactual (econometría) y modelos macroeconómicos, presentando un conjunto de contribuciones dentro de cada una de estas metodologías. El primer conjunto de contribuciones se centra en la evaluación de la política de cohesión a través de modelos macroeconómicos con una dedicación especial al nuevo modelo desarrollado por la Comisión Europea llamado RHOMOLO. El segundo conjunto de contribuciones se basa en evaluaciones econométricas de diferentes aspectos de la política de cohesión, y finalmente el monográfico se cierra con un ejercicio de evaluación fundamenta en la teoría.

We study the optimal dynamics of an AK economy where population is uniformly distributed along the unit circle. Locations only differ in initial capital endowments. Spatio-temporal capital dynamics are described by a parabolic partial differential equation. The application of the maximum principle leads to necessary but non-sufficient first-order conditions. Thanks to the linearity of the production technology and the special spatial setting considered, the value-fonction of the problem is found explicitly, and the (unique) optimal control is identified in feedback form. Despite constant returns to capital, we prove that the spatio-temporal dynamics, induced by the willingness of the planner to give the same (detrended) consumption over space and time, lead to convergence in the level of capital across locations in the long-run., Nous étudions la dynamique optimale d'une économie Ak dans laquelle la population est distribuée uniformément le long du cercle unité. Les lieux ne diffèrent que par leur dotation initiale de capital. La dynamique du capital est décrite par une équation aux dérivées partielles dans l'espace et le temps. Grâce à la linéarité de la technologie de production et le cadre spatial, nous trouvons la fonction de valeur d'une façon explicite et identifions le contrôle optimal qui est par ailleurs unique. Malgré les rendements d'échelle constants, nous démontrons que la dynamique dans le temps et l'espace, induite par la volonté du décideur de donner le même niveau de consommation à travers le temps et l'espace, mène à la convergence spatiale du capital à long terme.

Allan G. J. The regional economic impacts of biofuels: a review of multisectoral modelling techniques and evaluation of applications, Regional Studies. The regional economic impact of biofuel production depends upon a number of interrelated factors: the specific biofuels feedstock and production technology employed; the sector's embeddedness in the rest of the economy, through its demand for local resources; and the extent to which new activity is created. These issues can be analysed using multisectoral economic models. Some studies use input–output (IO) and social accounting matrix (SAM) modelling frameworks, whilst a nascent computable general equilibrium (CGE) literature has begun to examine the regional impact of biofuel development. This paper reviews, compares and evaluates these approaches for modelling the regional economic impacts of biofuels.

In this paper we investigate the factors affecting income levels, income growth, and poverty reduction in rural Indonesia following the crisis of 1997/98. We particu- larly investigate the relative roles of non-farm incomes, productivity improvements achieved via changes in crops versus improvements on the same crops, and demographic changes induced by the crisis on income dynamics in rural Indonesia. Using a unique household panel data set for Central Sulawesi that allows us to control for a large set of household and geographical characteristics, household fixed effects as well as endogeneity issues, we find that falling household size and the adoption and intensification of new cash crop varieties can explain a substantial part of the observed post-crisis developments. Moreover, we compare our results to cross-sectional data from SUSENAS, Indonesia\'s large scale national household survey. While the overall determinants of rural incomes are very similar across both data sets, we find that the importance of agricultural self-employed income seems to be higher in Central Sulawesi than in most other parts of Indonesia. Although several factors could explain these differences, lessons from our Central Sulawesi data suggests that unexploited potentials in the production of cash crops in other areas of Indonesia might contribute to these findings.

We study how unionization affects competitive selection between heterogeneous firms when wage negotiations can occur at the firm or at the profit-centre level. With productivity specific wages, an increase in union power has: (i) a selection-softening; (ii) a counter-competitive; (iii) a wage-inequality; and (iv) a variety effect. In a two-country asymmetric setting, stronger unions soften competition for domestic firms and toughen it for exporters. With profit-centre bargaining, we show how trade liberalization can affect wage inequality among identical workers both across firms (via its effects on competitive selection) and within firms (via wage discrimination across destination markets).

This paper provides a general equilibrium model where jurisdictions offer not only public goods, but also job opportunities. In a context of multiple types of consumers, labor complementarities, and anonymous crowding, heterogeneous populated communities form in equilibrium with an endogenous wage system that is labor-type and jurisdiction-type dependent. Equilibrium jurisdiction structures depend on the relative scarcity of labor types, unlike the situation in Berglas' (1976) partial equilibrium analysis. For a large economy, we prove that equilibrium exists and that the set of equilibria is equivalent to the core.

We develop a general equilibrium model of residential choice and study the effects of two housing aid policies, public housing units and housing vouchers. Land is differentiated by both residential accessibility and local public goods, and the provision levels of local public goods are determined by property tax revenues and neighborhood compositions. Households differ in their incomes and preferences for local public goods. Housing aid policies are financed by general income taxes. We discuss how the location of public housing units is a fundamental policy variable, in addition to the numbers and sizes of units, and argue that vouchers not only cause less distortion for social welfare compared to public housing, but may also improve overall welfare.

We provide an analytical approach that facilitates understanding the bifurcation mechanism of a wide class of economic models involving spatial agglomeration of economic activities. The proposed method overcomes the limitations of the Turing (1952) approach that has been used to analyze the emergence of agglomeration in the multi-regional core-periphery (CP) model of Krugman (1993, 1996). In other words, the proposed method allows us to examine whether agglomeration of mobile factors emerges from a uniform distribution and to analytically trace the evolution of spatial agglomeration patterns (i.e., bifurcations from various polycentric patterns as well as a uniform pattern) that these models exhibit when the values of some structural parameters change steadily. Applying the proposed method to the multi-regional CP model, we uncover a number of previously unknown properties of the CP model, and notably, the occurrence of “spatial period doubling bifurcation” in the CP model is proved.

In many countries, the government pays almost identical nominal wages to workers living in regions with notable economic disparities. By developing a two-region general equilibrium model with endogenous migration and search frictions in the labour market, I study the differences in terms of unemployment, real wages, and welfare between a regional wage bargaining process and a national one in the public sector. Adopting the latter makes residents in the poorer region better off and residents of the richer region worse off. Private sector employment decreases in the poorer region and it increases in the richer one. Under some conditions, the unemployment rate in the poorer region soars. Simulation results also show that a regional bargaining scheme may increase inequality.

Innovation is a crucial driver of urban and regional economic success. Innovative cities and regions tend to grow faster and have higher average wages. Little research, however, has considered the potential negative consequences: as a small body of innovators gain relative to others, innovation may lead to inequality. The evidence on this point is fragmented, based on cross-sectional evidence on skill premia rather than overall levels of inequality. This paper provides the first comparative evidence on the link between innovation and inequality in a continental perspective. Using micro data from population surveys for European regions and US Cities, the paper finds, after controlling for other potential factors, good evidence of a link between innovation and inequality in European regions, but only limited evidence of such a relationship in the United States. Less flexible labour markets and lower levels of migration seem to be at the root of the stronger association between innovation and income inequality in Europe than in the US.

Motivated by several empirical studies showing a positive relationship between residential density and vehicle fuel efficiency chosen by the residents, this paper presents a modified monocentric city model with endogenous vehicle-typechoices. Consumers are assumed to explicitly consider driving inconvenience in the choice of vehicle sizes, and the resulting commuting cost is a function of residential density. This vehicle-type choice problem is embedded in an otherwise standardmonocentric city model. A convenience-related advantage in less-dense areas makes our bid–rent curve flatter than that in the standard model. Comparative static analyses suggest that an increase in commuting cost per mile, especially from increasedunit cost of driving inconvenience, may induce spatial expansion of the city. Since driving inconvenience is lower in less-dense suburbs, the increased unit cost of driving inconvenience pulls people toward suburbs, potentially leading to urban sprawl. Part of comparative static analysis shows how the city's vehicle fuel efficiency depends on the city characteristics such as population and agricultural rent.

This paper models interstate trade patterns of U.S. states using a partial equilibrium trade model. The theoretical model deviates from the existing gravity literature by employing trade estimations in ratio form, with the ratio of imports from different sources, rather than the level of bilateral trade between two locations. Using this specification, together with considering the production side through technology levels, the elasticity of substitution across goods, the elasticity of substitution across varieties of each good, and the good specific elasticity of distance measures are all identified in the empirical analysis, which is not the case in gravity type studies. The ratio transformation also effectively eliminates any proportional distribution margin, international trade, or overstatement of distance measures from the theoretical trade equation. Compared to empirical international trade literature, the elasticity of substitution is estimated to be lower, while the elasticity of distance is estimated to be higher intranationally.

This analysis examines the effects of reducing the supply of foreign-born labor on the Idaho economy. We estimate effects on gross state product, state and local tax revenue, total economic output, employment, wages, and changes in household welfare measured as equivalent variation. Estimates of labor usage by industry sector are obtained from governmental and non-governmental data sources and are incorporated into a 14 sector nested computable general equilibrium (CGE) model with five primary factors of production consisting of capital and four different labor groups (foreign-born less educated, native-born less educated, foreign-born more educated, and native-born more educated). The results of the model indicate that at the expected elasticities of substitution between similarly educated native-born and foreign-born labor, the reduction of the foreign-born less educated labor supply modestly increases the demand for native-born less educated labor while causing reductions in state GDP, total economic output, and household utility. The importance of the elasticities of substitution between the various labor groups in influencing the impact results is discussed and a sensitivity analysis performed. The CGE results are then compared to the results of another common model for estimating impacts, an input-output model, and the differences are discussed.

Los controles de precios son medidas que pueden afectar considerablemente a los sectores sujetos a dichas políticas. Mediante un modelo de equilibrio general dinámico estocástico con dos tipos de agentes: campesinos y citadinos, calibrado para Bolivia, se muestra que, ante caídas en la productividad del sector agropecuario, el empleo rural agropecuario y la producción agropecuaria se ven mermadas cuando existen controles de precios. Asimismo, mejoras de productividad en el sector rural no agropecuario representan menores ganancias con precios fijos en relación a un mecanismo que permita que los precios se ajusten. En una simulación de las políticas realizadas en 2009 en Bolivia se encuentra que éstas generan desequilibrios en los mercados, provocando escasez de los productos agropecuarios en magnitudes considerables.

This paper deals with the relationship between decentralisation, regional economic development, and income inequality within regions. Using multiplicative interaction models and regionally aggregated microeconomic data for more than 100 000 individuals in the European Union (EU), it addresses two main questions. First, whether fiscal and political decentralisation in Western Europe has an effect on within-regional interpersonal inequality. Second, whether this potential relationship is mediated by the level of economic development of the region. The results of the analysis show that greater fiscal decentralisation is associated with lower interpersonal income inequality, but, as regional income rises, further decentralisation is connected to a lower decrease in inequality. This finding is robust to the measurement and definition of income inequality, as well as to the weighting of the spatial units by their population size. Keywords: income inequality, income per capita, fiscal and political decentralisation, interaction, regions, Europe

Learning about the impact of immigration on the labor market outcomes of natives is a topic of major concern for immigrant-receiving countries. There exists an extensive literature evaluating the impact of immigration on the employment and wages of natives in the U.S. Yet, despite the significant degree of occupational segregation by gender regardless of workers' origin, the literature has traditionally treated male and female immigrants as a homogenous group when examining the impact of immigration on native workers. Instead, using data from Spain, where the immigrant population has risen from 4 percent to 10 percent of the population within a decade, we allow for male and female foreign-born workers to have distinct impacts on the employment patterns of native men and women. This proves to be important as foreign-born workers only seem to have a significant impact on the employment pattern of native workers of the same sex. Furthermore, foreign-born male (female) workers do not appear to be perfect substitutes of similarly skilled native male (female) workers, which may help explain the null or small impacts of immigration on native employment and wages. Instead, immigration appears to have affected the task specialization and occupational distribution of natives of the same gender.

This paper considers the effects of the local human capital level and the presence of higher education institutions on the quality of life in U.S. metropolitan areas. The local human capital level is measured by the share of adults with a college degree, and the relative importance of higher education institutions is measured by the share of the population enrolled in college. This paper finds that quality of life is positively affected by both the local human capital level and the relative importance of higher education institutions. Furthermore, these effects persist when these two measures are considered simultaneously, even though the two are highly correlated. That is the human capital stock and higher education institutions have a shared effect and also separate effects on quality of life.

In this paper we use a CGE macro-micro modelling approach to analyse the distributional impact of the food crisis and to examine a couple of policy responses in two neighbouring West African countries. Both countries are strongly dependent on agriculture; both have similar climates and share many other features. However, the approach we use captures structural differences at both the macro level and the micro level for household income and expenditure structures. Our results reveal surprising and significant differences for poverty impact at the national and sub-group levels, as well as for inequality and pro-poor analysis. These differences are present for the world price increase of agricultural goods as well as policy responses to the food crisis. Our results highlight the importance of country-specific analysis and the risk of extrapolating conclusions from one country to another.

The main aim of this paper is to investigate how far State Bank of Pakistan is prepared enough to undertake its monetary policy operations - right from its operational target (Reserve Money) to mid term target (M2) and ultimate target CPI (consumer price index) and Real GDP (Gross Domestic product) growth) by choosing numbers of inflation sets for its annual target. In the paper three examples from Chile, Turkey and Mauritius, have been used who have adopted the system, as they seem more close to Pakistan as a developing nation. Up till 2005, SBP was using monetary aggregate as for its operational target i.e. Reserve Money, However onward, it has started using corridor arrangement where discount rate the main interest rate for Pakistan serves as ceiling for the corridor and floor is set at 300 bp below this rate. Accordingly, market is allowed to move its overnight rate within the corridor of 300 bp. In this way Pakistan has now moved from aggregate targeting to inertest rate targeting. Initially this arrangement was implicit but from 2009 onward, it has gone with this arrangement explicitly. Going forward as one would see that adoption of inflation target right from the basis is a step toward right direction, but yet Pakistan is not prepared enough to adopt inflation targeting as its operational target.

En este artículo se presentan los resultados obtenidos al aumentar algunas de las pensiones más bajas que perciben los hogares mayores de 65 años en España. Las simulaciones se han realizado con un modelo de equilibrio general aplicado y los resultados obtenidos indican que el aumento del déficit público ocasionado por el incremento de las pensiones se podría contrarrestar, sin imponer costes sustanciales a los hogares menores de 65 años, elevando bien los tipos del impuesto sobre la renta o valor añadido; esos costes resultan notablemente más altos cuando se elevan los tipos de las contribuciones a la Seguridad Social.

Business environment institutions create an ambient for small and medium-sized enterprises, their activities are reflected in, among others the competitiveness of this group of entities. Within a dynamically changing market economy the BEI, similar to other entities, compete with one another. In the effort to achieve and maintain market advantage, BEI, similar to other organisations, are forced to conduct in depth environment analysis. The paper aims at analysing the environment and internal conditions of operation for business environment institutions in Warmia-Masurian voivodeship. The presented results come from the surveys conducted for implementation of the project Business Environment Institutions survey from the perspective of the competitiveness and innovation of services provided with recommendations, developed within the frameworks of the project Regional System of Services - InnoWaMa Network implemented with involvement of the Operational Programme Human Capital 2007-2013 (VIII. Regional Staff of the Economy, measure 8.2 Knowledge Transfer, sub-measure 8.2.2 Regional Innovation Strategies) by the Department of Regional Policy of the Marshal's Office of the Warmia-Masurian Provence in Olsztyn. The main information source for the preparation of this publication was the primary research conducted using a survey method. The basis for an analysis was data collected from 24 BEI.

Business environment institutions create an ambient for small and medium-sized enterprises, their activities are reflected in, among others the competitiveness of this group of entities. Within a dynamically changing market economy the BEI, similar to other entities, compete with one another. In the effort to achieve and maintain market advantage, BEI, similar to other organisations, are forced to conduct in depth environment analysis. The paper aims at analysing the environment and internal conditions of operation for business environment institutions in Warmia-Masurian voivodeship. The presented results come from the surveys conducted for implementation of the project Business Environment Institutions survey from the perspective of the competitiveness and innovation of services provided with recommendations, developed within the frameworks of the project Regional System of Services - InnoWaMa Network implemented with involvement of the Operational Programme Human Capital 2007-2013 (VIII. Regional Staff of the Economy, measure 8.2 Knowledge Transfer, sub-measure 8.2.2 Regional Innovation Strategies) by the Department of Regional Policy of the Marshal's Office of the Warmia-Masurian Provence in Olsztyn. The main information source for the preparation of this publication was the primary research conducted using a survey method. The basis for an analysis was data collected from 24 BEI.

Successive enlargements of the European Union have led to increasing heterogeneity of the development levels of the states and regions members. The Romanian development regions are among the most poorly economically developed European regions and are regarded as economies based on production factors where the development of economy is mainly triggered by the poorly qualified labour and the natural resources. This paper aims to analyse and to identify the factors lying at the bottom of regional development and the causes of Romanian regional disparities, by comparative analyse and the break down the basic development indicators into their components. The regional economic disparities from Romania tend to be more prominent due following causes: low level of development of most regions, structure of economy dominated by economic sectors with a low productivity; the low research-innovation potential; the low share of the population having a higher education, reduced capacity of the poorly developed regions to withhold the highly qualified labour, the weak development of infrastructure, particularly poor quality of infrastructure networks. Romania stays anchored in a development model characterized by an anachronous economic structure, a poorly qualified labour, a slow accumulation of capital and a reduced sustainability of the development rate.

We investigate the 30 year increase in the level and dispersion of house prices across U.S. metropolitan areas in a calibrated dynamic general equilibrium island model. The model is based on two main assumptions: households flow in and out metropolitan areas in response to local wage shocks, and the housing supply cannot adjust instantly because of regulatory constraints. Feeding in our model the 30 year increase in cross-sectional wage dispersion that we document based on metropolitan-level data, we generate the observed increase in house price level and dispersion. In equilibrium, workers flow towards exceptionally productive metropolitan areas and drive house prices up. The calibration also reveals that, while a baseline level of regulation is important, a tightening of regulation by itself cannot account for the increase in house price level and dispersion: in equilibrium, workers flow out of tightly regulated towards less regulated metropolitan areas, undoing most of the price impact of additional local supply regulations. Finally, the calibration with increasing wage dispersion suggests that the welfare effects of housing supply regulation are large.

We investigate the factors behind the recent decline in the U.S. share of world merchandise exports in an attempt to determine how big a role the changing productivity of U.S. firms has played. We do so against the backdrop of a measure of cost competitiveness which, insofar it is inferred from actual trade ows, we refer to as 'revealed marginal costs' (RMC). Although, in line with our purpose, we derive such measure as an implication of a trade model with (intra-industry) firm heterogeneity, computation does not require firm level data but only aggregate bilateral trade ows, domestic trade included. Brought to the data for the manufacturing sector, such measure reveals that, notwithstanding significant heterogeneity across industries, most U.S. sectors are indeed losing momentum relative to their main competitors, as we find U.S.'s RMC to grow by an average 14%, relative to the other G20 countries. The RMC structure identifies in market size, trade freeness and imports its "revealing-observable" components - while market size is found to be the main responsible of such decline on average, cost competitiveness seems to have benefited from a good combination of increasing trade freeness and decreasing imports, relative to the other G20 countries. The best performing countries in terms of RMC (China and India among others) characterize, however, for an increase in trade freeness higher than in the U.S. At the sectoral level, the "Machinery" industry is the most critical, followed by the "Chemicals" and "Equipment" industries.

The paper studies optimal taxation (subvention) when tourism is associated with ‘multiple externalities’, using a simple dynamic model of a small open economy specializing completely in the production of tourism services and populated by a large number of intertemporally optimizing agents. Depending on the volume of tourism production, the externality can be either positive or negative. The study shows that the first best optimum, achieved by a central planner recognizing the externality, can be replicated in a decentralized economy by using a time-varying tax rate. This ensures (i) that the steady state of the first best optimum is reached and (ii) that the speed of convergence to steady state is socially optimal.

A térbeli számszerűsített általános egyensúlyi modellek az új gazdaságföldrajz empirikus alkalmazásainak eszközei. Szemléleti-módszertani gyökereiket tehát az új gazdaságföldrajzi és a számszerűsített általános egyensúlyi modellekben találjuk meg. Tanulmányunkban a Nemzeti Fejlesztési Ügynökség részére az Új Magyarország Fejlesztési Terv hatáselemzésére kidolgozott GMR-Magyarország elnevezésű modellrendszerbe épített modellt ismertetjük, valamint egy szimulációval illusztráljuk a modell használatát. Journal of Economic Literature (JEL) kód: C68, D58, R13, R38, R58., Spatial, numerical models of general equilibrium are empirical tools of the new economic geography, with their methodology and outlook rooted in the new economic geographical and numerical models of general equilibrium. The study presents the new GMR-Hungary model system devised for the National Development Agency for the New Hungary De-velopment Plan, and illustrates its use with a simulation.

The economic convergence consists in the very close, even identical evolutions of one variable in two different countries or regions. Within the European model, the macroeconomic and cohesion policies insure a good substantiation of the sustained economic

The US, the EU, Brazil and India met in Germany in June 2007 with a view to bridging differences between developed and developing countries on the Doha Round of trade negotiations. However, the talks broke down because of disagreement on the intertwined issues of agricultural protection and Non-Agricultural Market Access (NAMA). This study uses the first regional computable general equilibrium (CGE) model of Pakistan to evaluate the national and regional impacts of increasing NAMA as per two actual proposals of the US and the EU and Brazil and India at the 2007 meeting. The results suggest that overall benefits to Pakistan’s economy—in terms of increased exports and real GDP—will plausibly be higher under the NAMA proposal advocated by the US and the EU than that advanced by Brazil and India. However, inter-industry inequalities in Pakistan and the existing regional disparities between the largest region and the three smaller regions of the country are projected to be higher under the proposal of the US and EU. Drawing on the results of the CGE simulations, the study puts forward a NAMA proposal which can be beneficial and acceptable to both developed and developing countries. A breakthrough in NAMA may also break the impasse over the agricultural issues because of the interdependence of the two issues.