New Economic Geography

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The New Economic Geography is a more recent approach to foreign trade theory , which focuses on spatial agglomeration processes and increasing returns to scale through specialization.

This approach, founded by Paul Krugman in the early 1990s, differs from the conventional approach ( comparative cost advantage through differences in resources and productivity levels ; constant economies of scale ). He also sets different accents compared to the previously known location theory , economic geography or urbanism .

The current foreign trade theory assumes that the factors of production are immobile and that the exchange of goods takes place without any transport costs . The theory of New Economic Geography , on the other hand, assumes the mobility of production factors and takes transport costs into account. The assumption of a perfect market is thereby dropped; multiple equilibria are possible, as well as unbalanced cumulative processes that give random historical situation conditions and the mechanism of self-fulfilling prognoses a great influence on the economic development of a region.

The New Economic Geography contrasts the widespread view that the increasing removal of barriers to foreign trade would be equally advantageous for all regions involved . The emergence of agglomerations means that income divergences can be predicted, which will continue to intensify over a long period of time.

literature

  • Paul Krugman: Geography and Trade. MIT Press: Cambridge, Mass. 1993, ISBN 0-262-61086-8 (PB).
  • RE Baldwin, R. Forslid, P. Martin, P., GI Ottaviano, F. Robert-Nicoud: Economic Geography and Public Policy . Princeton, Oxford 2003.
  • M. Fujita , PR Krugman, AJ Venables: The Spatial Economy - Cities, Regions, and International Trade . Cambridge 1999.
  • P. Krugman: Development, Geography, and Economic Theory. Cambridge, London 1995
  • E. Wintzer: Regional Policy and New Economic Geography: Basics, Models, Developments. Saarbrücken 2007.

Individual evidence

  1. ^ Paul Krugman: Geography and Trade. MIT Press: Cambridge (Mass.) 1991.
  2. ↑ Wolfgang Dauth: Agglomeration and regional employment growth. IAB Discussion Paper, 07/2010, Nuremberg 2010. 34 p .; 512 kB.