Testing Nonlinear New Economic Geography Models

Bode, Eckhardt and Mutl, Jan (July 2010) Testing Nonlinear New Economic Geography Models. Former Series > Working Paper Series > IHS Economics Series 253


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Abstract: We test a New Economic Geography (NEG) model for U.S. counties, employing a new strategy that allows us to bring the full NEG model to the data, and to assess selected elements of this model separately. We find no empirical support for thefull NEG model. Regional wages in the U.S. do not respond to local wage shocks in the way predicted by the model. We show that the main reason for this is that the model does not predict either the migration patterns induced by local wage shocks or the repercussions of this migration for regional wages correctly.;

Item Type: IHS Series
Keywords: 'New economic geography' 'Spatial econometrics'
Classification Codes (e.g. JEL): C21, C51, R12
Date Deposited: 26 Sep 2014 10:39
Last Modified: 26 Sep 2019 16:36
ISBN: 1605-7996
URI: https://irihs.ihs.ac.at/id/eprint/2002

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