The Economy as a Complex Spatial System: Macro, Meso and Micro Perspectives

This book is open access under a CC BY-NC 4.0 license. This collected volume represents the final outcome of the COST Action IS1104 “The EU in the new complex geography of economic systems: models, tools and policy evaluation”. Visualizing the EU as a complex and multi-layered network, the book is organized in three parts, each of them dealing with a different level of analysis: At the macro-level, Part I considers the interactions within large economic systems (regions or countries) involving trade, workers migration, and other factor movements. At the meso-level, Part II discusses interactions within specific but wide-ranging markets, with a focus on financial markets and banking systems. Lastly, at the micro-level, Part III explores the decision-making of single firms, especially in the context of location decisions.

Intro -- About COST -- Acknowledgement -- Contents -- Contributors -- Introduction -- 1 The COST Action IS1104 ``The EU in the New Complex Geography of Economic Systems: Models, Tools and Policy Evaluation'' -- 2 The Macro Perspective - Economic Geography -- 3 The Meso Perspective - Financial Markets -- 4 The Micro Perspective - Strategic Decisions and Interactions -- References -- The Macro Perspective - Economic Geography -- Policy Issues in NEG Models: Established Results and Open Questions -- Abstract -- 1 Policy Issues in NEG Models: A General Discussion -- 1.1 NEG Models in a Nutshell -- 1.2 Policy in NEG Models: Fundamental Questions and the Applicability Gap -- 2 Public Spending: Productivity and Demand Effects -- 3 Tax Competition and Agglomeration -- 4 Trade: Unilateral Protectionism and Trade Agreements -- References -- Emerging Trade Patterns in a 3-Region Linear NEG Model: Three Examples -- 1 Introduction -- 2 The Model -- 2.1 Basic Set-Up -- 2.2 Production -- 2.3 Utility -- 2.4 Trade Costs -- 3 Short-Run Equilibrium -- 3.1 Short-Run Solutions -- 4 Definition of the Basic Dynamic Equations -- 5 Long-Run Equilibria Properties in Model 1 -- 6 Long-Run Equilibria Properties in Model 2 -- 7 Long-Run Equilibria Properties in Model 3 -- 8 Final Remarks -- References -- Advances in Spatial Econometrics: Parametric vs. Semiparametric Spatial Autoregressive Models -- 1 Introduction and Motivation -- 2 Parametric Spatial Autoregressive Models -- 2.1 Modeling Spatial Interaction Effects: Spatial Autoregressive Models for Cross-Sectional Data -- 2.2 Modeling Spatial Spillovers and Unobserved Spatial Heterogeneity: Spatial Autoregressive Models for Panel Data -- 2.3 Modeling Spatial Dependence, Spatial Heterogeneity and Common Factors: Spatial Autoregressive Models for Large Panel Data -- 3 Semiparametric Spatial Autoregressive Models.

3.1 Modeling Spatial Heterogeneity and Spatial Dependence: MGWR-SAR -- 3.2 Modeling Spatial Dependence, Spatial Heterogeneity and Nonlinearities: P-Spline Models for Cross-Sectional Data and Short Panels -- 3.3 Modeling Spatial Spillovers, Spatial Heterogeneity, Nonlinearities and Time-Related Factors: Spatio-Temporal Semiparametric Autoregressive Models for Large Panel Data -- 4 Software -- 5 Conclusions -- References -- Looking Ahead: Part I -- Abstract -- 1 Introduction -- 2 Summary of the Research Conducted Within the Action -- 3 Main Results and Open Questions -- 3.1 Main Results -- 3.2 Open Questions -- 4 Suggested Topics for Future Research -- The Meso Perspective - Financial Markets -- Systemic Risk and Macroeconomic Fat Tails -- 1 Introduction -- 2 The Model Without Fire Sales -- 3 Results Without Fire Sales -- 4 The Model with Fire Sales -- 5 Results with Fire Sales -- 6 Conclusion -- A Appendix: Numerical Example -- References -- Market Interactions, Endogenous Dynamics and Stabilization Policies -- Abstract -- 1 Introduction and Outline -- 2 Market Interactions -- 3 Stabilization Policies -- 3.1 Optimal Trade Barriers -- 3.2 Profit Taxes -- 4 Conclusions and Outlook -- References -- Looking Ahead: Part II -- 1 Future Challenges -- References -- The Micro Perspective - Social and Industrial Interactions -- A Dynamic Model of Firms' Strategic Location Choice -- 1 Introduction -- 2 The Model -- 3 Markov Perfect Equilibria -- 4 Economic Analysis -- 5 Concluding Remarks -- References -- Strategic Corporate Social Responsibility by a Local Firm Against a Multinational Enterprise -- 1 Introduction -- 2 The Model -- 3 The Multinational Firm's Modes of Entry -- 4 Comparing FDI and Exports -- 5 Conclusion -- References -- Knowledge Spillovers, Congestion Effects, and Long-Run Location Patterns -- 1 Introduction -- 2 The Model.

3 Equilibrium Location Patterns: Local Stability and Efficiency -- 4 Location Patterns: The Role of Knowledge Spillovers and Congestion Costs -- 5 Conclusions -- References -- Looking Ahead: Part III -- 1 Conclusions and Future Challenges -- References.