New economic geography and regional price level

Review of Regional Research - Tập 28 - Trang 43-60 - 2007
Reinhold Kosfeld1, Hans-Friedrich Eckey1, Matthias Türck1
1University of Kassel, Institute of Economics, Kassel, Deutschland

Tóm tắt

In New Economic Geography (NEG), price effects play a crucial role as a forward linkage in the cumulative process of spatial concentration. This paper examines the potential contribution of Helpman’s NEG model in predicting cost of living and prices of goods groups at a regional scale. We particularly aim at developing NEG-based econometric models for the overall regional price level, prices of tradable and non-tradable goods and housing prices. The empirical price models are built with the aid of spatial-econometric techniques. The predictive power of the estimated models is assessed by cross-validation using a sample of southern German districts. Econometric analysis shows that crucial features of the price mechanism of the Helpman model are not backed by the evidence.

Tài liệu tham khảo

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