New Economic Geography

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An overwhelming feature of economic activity is its spatial unevenness. It shows up in income disparities between countries and regions, in clustering of industries, and in the formation of urban systems. We want to explain the location of economic activity and how this affects productivity and living standards in different countries and regions. An important innovative element in our approach is that we draw out complementarities between studying international and sub-national spatial issues.

In recent years the European Union expanded eastwards to include several former communist countries. The integration of these countries into the European Union provides a number of challenges and opportunities including migration, competition in product markets, and the outsourcing of labour-intensive stages of production to lower cost locations. One of the most dramatic examples of this regional integration was the reunification of West and East Germany in 1990. CEP research explores the implications of Germany's division and reunification for the spatial distribution of economic activity within West Germany (Discussion Paper No 688, final version published on December 2008 in the American Economic Review). Our researchers show that cities close to the new border between East and West Germany experienced a disproportionate loss of market access relative to other West German cities following Germany's division, due to the loss of nearby trading partners with whom they could interact at low transportation costs prior to division. The German reunification, initiated in 1990, began to reverse these relative differences between border and non-border cities.

The shift from rural to urban settlement has a wide ranging of implications for infrastructure, public health, the environment and economic performance. As a result, urbanisation is central to many policy debates and is viewed as a key part of economic development. While this transition from rural to urban is largely complete in developed countries such as the United States, the urbanisation process continues swiftly in developing countries such as Brazil, China and India. And although the urbanisation process involves large-scale reallocations of population from rural to urban areas, much of our existing knowledge about this process comes from city or metropolitan area data that exclude rural ones. Using a novel dataset that encompasses both the United States and Brazil, CEP research provides new evidence on urbanisation (Discussion Paper No 892); we find, for example, that population growth is independent of the size of the population when rural areas are taking into consideration.

These and other related topics have also been studied in the following recent CEP papers:

CEP Discussion Paper
The Spatial Organization of Multinational Firms
Fabrice  Defever,  December 2010
Paper No' CEPDP1029: Read Abstract | Full paper

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CEP Discussion Paper
Trading Partners and Trading Volumes: Implementing the Helpman-Melitz-Rubinstein Model Empirically
J. M. C.  Santos Silva,  Silvana  Tenreyro,  June 2009
Paper No' CEPDP0935: Read Abstract | Full paper

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CEP Discussion Paper
The Empirics of New Economic Geography
Stephen  Redding,  April 2009
Paper No' CEPDP0925: Read Abstract | Full paper

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CEP Discussion Paper
Economic Geography: A Review of the Theoretical and Empirical Literature
Stephen  Redding,  January 2009
Paper No' CEPDP0904: Read Abstract | Full paper

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CEP Discussion Paper
Why Capital does not Migrate to the South: A New Economic Geography Perspective
Jang Ping  Thia,  November 2008
Paper No' CEPDP0895: Read Abstract | Full paper

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CEP Discussion Paper
Survival of the Fittest in Cities: Agglomeration, Selection, and Polarisation
Kristian  Behrens,  Frédéric  Robert-Nicoud,  October 2008
Paper No' CEPDP0894: Read Abstract | Full paper

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CEP Discussion Paper
Urbanisation and Structural Transformation
Guy  Michaels,  Ferdinand  Rauch,  Stephen  Redding,  October 2008
Paper No' CEPDP0892: Read Abstract | Full paper

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CEP Discussion Paper
Evolution of Locations, Specialisation and Factor Returns with Two Distinct Waves of Globalisation
Jang Ping  Thia,  June 2008
Paper No' CEPDP0875: Read Abstract | Full paper

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CEP Discussion Paper
Was Germany Ever United? Evidence from Intra- and International Trade 1885-1933
Nikolaus  Wolf,  May 2008
Paper No' CEPDP0870: Read Abstract | Full paper

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CEP Discussion Paper
History and Industry Location: Evidence from German Airports
Stephen  Redding,  Daniel M.  Sturm,  Nikolaus  Wolf,  July 2007
Paper No' CEPDP0809: Read Abstract | Full paper

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CEP Discussion Paper
The Effect of Information and Communication Technologies on Urban Structure
Y  Ioannides,  Henry  Overman,  Esteban  Rossi-Hansberg,  Kurt  Schmidheiny,  July 2007
Paper No' CEPDP0812: Read Abstract | Full paper

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CEP Discussion Paper
Economic Linkages Across Space
Henry  Overman,  Patricia  Rice,  Anthony J.  Venables,  June 2007
Paper No' CEPDP0805: Read Abstract | Full paper

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