Research on the spatial aspects of economic activity has flourished over the past decade due to the emergence of new theory, new data, and an intense interest on the part of policymakers, especially in Europe but increasingly in North America and elsewhere as well. However, these efforts—collectively known as the “new economic geography”—have devoted little attention to the policy implications of the new theory.
Economic Geography and Public Policy fills the gap by illustrating many new policy insights economic geography models can offer to the realm of theoretical policy analysis. Focusing primarily on trade policy, tax policy, and regional policy, Richard Baldwin and coauthors show how these models can be used to make sense of real-world situations. The book not only provides much fresh analysis but also synthesizes insights from the existing literature.
The authors begin by presenting and analyzing the widest range of new economic geography models to date. From there they proceed to examine previously unaddressed welfare and policy issues including, in separate sections, trade policy (unilateral, reciprocal, and preferential), tax policy (agglomeration with taxes and public goods, tax competition and agglomeration), and regional policy (infrastructure policies and the political economy of regional subsidies). A well-organized, engaging narrative that progresses smoothly from fundamentals to more complex material, Economic Geography and Public Policy is essential reading for graduate students, researchers, and policymakers seeking new approaches to spatial policy issues.
Richard Baldwin is Professor of International Economics at the Graduate Institute of International Economics in Geneva. Rikard Forslid is Associate Professor of Economics at Stockholm University. Philippe Martin is Professor of Economics at the University of Paris 1 Panthéon-Sorbonne. Gianmarco I. P. Ottaviano is Professor of Economics at the University of Bologna, Italy. Frederic Robert-Nicoud is Assistant Professor of Economics at the University of Geneva.
"Even more impressive than the speed with which this monograph was created, is the breadth of issues that is covered and the wealth of results that is derived and synthesized. For anyone thinking about trade, tax, and regional policies, it is required reading."—Michael Pflüger, Journal of Economic Geography
"The impressive efforts by Baldwin et al. to construct various [New Economic Geography] inspired models that are more easily tractable and perfectly solvable may inspire increased efforts to test these models empirically, which will further aid in a more robust empirical identification of the driving forces of firm location behavior and related regional welfare issues."—Jacob A. Jordaan, Progress in Human Geography
"I like this book very much. It provides a wonderful overview of what can be accomplished with the tools of economic geography in various fields of economics. De novo analysis is presented through several new models and results that extend the field in many directions. The style of presentation strikes a very good balance between intuition and rigor, and the various chapters obey the same organization, making the work very accessible."—Jacques Thisse, Center for Operations Research and Econometrics, Université catholique de Louvain
"This book presents and analyses a wider range of new economic geography (NEG) models than are currently available, and undertakes a systematic analysis of how our thinking about welfare and public policy issues is altered by the NEG approach. These are both important contributions. The areas addressed are topical both to academics and to policymakers seeking new ways of thinking about regional and spatial policy issues."—Anthony Venables, London School of Economics
"This book represents a major contribution to the timely topic of economic geography and public policies. Well written, it provides a comprehensive policy analysis of spatial economics and lucid coverage of recent theoretical development within New Economic Geography. Economic Geography and Public Policy is a new must for graduate students and scholars in international trade, regional development, and economic geography."—Masahisa Fujita, Kyoto Institute of Economic Research, coauthor of The Spatial Economy
"This book addresses a topic that ranks among the hottest in the economics profession and which has also drawn considerable policy interest. It contributes an integrated theory and methodology to understanding the impact that geographic space and location play in shaping economic performance, and draws out the most pressing policy implications from these insights. By integrating locational factors into previously standard economic models, it injects new insights, sometimes quite unexpected and paradoxical, into what had previously been standard results."—David Audretsch, Director, Institute for Development Strategies, Indiana University
