Business Intelligence

The Empirics Of New Economic Geography

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Executive Summary

Although a rich and extensive body of theoretical research on new economic geography has emerged, empirical research remains comparatively less well developed. This paper reviews the existing empirical literature on the predictions of new economic geography models for the distribution of income and production across space. The discussion highlights connections with other research in regional and urban economics, identification issues, potential alternative explanations and possible areas for further research. Over the last two decades, the uneven distribution of economic activity across space has received renewed attention with the emergence of the "New economic geography" literature following Krugman (1991a).

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