Dynamic spatial general equilibrium

Benny Kleinman, Ernest Liu and Stephen Redding

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: We develop a dynamic spatial general equilibrium model with forward-looking investment and migration decisions. We characterize analytically the transition path of the spatial distribution of economic activity in response to shocks. We apply our framework to the re-allocation of US economic activity from the Rust Belt to the Sun Belt from 1965-2015. We find slow convergence to steady-state, with US states closer to steady-state at the end of our sample period than at its beginning. We find substantial heterogeneity in the effects of local shocks, which depend on capital and labor dynamics, and the spatial and sectoral incidence of these shocks.

Keywords: spatial dynamics; economic geography; trade; migration (search for similar items in EconPapers)
Date: 2021-07-28
New Economics Papers: this item is included in nep-dge, nep-geo, nep-int and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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https://cep.lse.ac.uk/pubs/download/dp1785.pdf (application/pdf)

Related works:
Journal Article: Dynamic Spatial General Equilibrium (2023)
Working Paper: Dynamic Spatial General Equilibrium (2021)
Working Paper: Dynamic spatial general equilibrium (2021)
Working Paper: Dynamic Spatial General Equilibrium (2021)
Working Paper: Dynamic Spatial General Equilibrium (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp1785

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