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Geography and Regional Economic Growth: The high cost of deviating from nature

Daniel Albalate (), Germà Bel () and Ferran A. Mazaira-Font ()
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Daniel Albalate: Department of Econometrics, Statistics and Applied Economics (Public Policy Unit). Universitat de Barcelona. John Keynes 1-11, 08034 Barcelona. Spain
Ferran A. Mazaira-Font: Department of Econometrics, Statistics and Applied Economics (Public Policy Unit). Universitat de Barcelona. John Keynes 1-11, 08034 Barcelona. Spain

No 202010, IREA Working Papers from University of Barcelona, Research Institute of Applied Economics

Abstract: We analyze the role of nature and geography in determining economic and social outcomes. We propose a theoretical model relating geography and nature to economic growth, and examine that model using data from NUTS 2 European regions. By doing this, we identify the predictive power of first-nature variables to explain regional population distribution. Then we analyze the effects of misadjustment between the actual and predicted distribution of populations on economic performance. Our results indicate that deviating from first-nature outcomes has a significant negative effect on economic growth. Furthermore, we find that departing from natural endowment has a negative effect on social cohesion. The main policy implication emerging from our analysis is that strategies that harmonize with nature and geography yield better social welfare and human well-being than those policies that conflict with them.

Keywords: Geography; Population; Growth; Conditional convergence; Inequality. JEL classification: O43; O44; Q57; R11; R12. (search for similar items in EconPapers)
Pages: 35 pages
Date: 2020-07, Revised 2020-07
New Economics Papers: this item is included in nep-gro and nep-ure
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Journal Article: Geography and regional economic growth: The high cost of deviating from nature (2022) Downloads
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