Working Paper: CEPR ID: DP5028
Authors: Pierre-Philippe Combes; Gilles Duranton; Henry G. Overman
Abstract: We consider the literatures on urban systems and New Economic Geography to examine questions concerning agglomeration and how areas respond to shocks to the economic environment. We first propose a diagrammatic framework to compare the two approaches. We then use this framework to study a number of extensions and to consider several policy relevant issues.
Keywords: diagrammatic exposition; new economic geography; urban and regional policy; urban systems
JEL Codes: R00; R58
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| location-specific shocks (C21) | local economic conditions (R11) |
| common shocks (E32) | adjustments across regions (R11) |
| integrative shocks (F02) | inter-area geography (R12) |
| integrative shocks (F02) | response to economic shocks (E32) |
| location-specific shocks (C21) | relative prices (P22) |
| relative prices (P22) | changes in quantities (C69) |
| changes in quantities (C69) | relocations of activity (J62) |