New Economic Geography: the Possibilities and Restrictions

Dmitry Izotov

Spatial Economics=Prostranstvennaya Ekonomika, 2013, issue 3, 123-160

Abstract: The article analyzes scientific publications on the new economic geography (NEG) relevance. On the basis of the publications array the author determined characteristic features of the simulation and the central idea of this research direction. Analysis showed that modeling in the terms of NEG is based on the approach of general equilibrium under monopolistic competition, endogenous factors and homogeneous space. The NEG central idea can be presented as follows: the increasing economy of scale is the main force for factors migration in homogeneous space. The theoretical studies analysis revealed that the development of NEG models is carried out by consideration of different options for the migration behavior of the agglomeration subjects and inclusion of theoretical constructs from adjacent areas, in particular, new economic growth theory and urban economics models. The article shows that empirical papers mainly test the NEG provisions in the terms of the model “core- periphery”. The extremely rare cases of testing other NEG models are apparently due to the absence of statistical data; the difficulty of obtaining reliable estimates of the elasticity of substitution of goods by different countries, regions and cities. Systematization of the scientific community criticism has allowed identifying the main problems of NEG: identification in the system of socio- economic researches, spatial characteristics ignoring, research object limitations, simplicity of the backgrounds, problems with empirical evidence. Further NEG development, according to experts, depends on obtaining of its specific place in the system of socio-economic researches or NEG may remain as one of the modeling approaches in the general equilibrium framework.

Keywords: ?; new; economic; geography; ?; increasing; economy; of; scale; ?; monopolistic; competition; ?; factors; of; production; ?; general; equilibrium; ?; transport; costs; ?; agglomeration; ?; substitution; elasticity; ?; migration; behavior; ?; criticism; of; the; new; economic; geography; ?; theoretical; and; empirical; researches (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:far:spaeco:y:2013:i:3:p:123-160

DOI: 10.14530/se.2013.3.123-160

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