PER Distinguished Lecture: Jacques Thisse

December 4, 2015 - 5:00am - 7:00am
1027 International Affairs Building New York, NY 10027
United States

Jacques Thisse, "A Very Short Introduction to Spatial Economics"

The Industrial Revolution has exacerbated regional disparities by an order of magnitude that was unknown before. The recent development of new information and communication technologies is triggering a new regional divide about which governments and the public should be aware. What economic tools can be used to understand those evolutions? As spatial economics deals with bringing location, distance, and land into economics, this makes it one of the main economic fields that can be employed to understand how the new map of economic activities is being drawn.

Yet, at first glance, the steady and spectacular drop in transportation costs since the mid-19th century---compounded by the decline of protectionism post-World War II and, more recently, by the near-disappearance of communication costs---is said to have freed firms and households from the need to be located near one another. Therefore, it is tempting to foresee the "death of distance" and the emergence of a "flat world" in which competition is thought of as a race to the bottom, with the lowest-wage countries as the winners.  But---and it is a big but---while it is true that the importance of proximity to natural resources has declined considerably, this does not mean that distance and location have disappeared from economic life. Quite the contrary is true. Recent work in spatial economics indicates that new forces, hitherto outweighed by natural factors, are shaping an economic landscape that, with its many barriers and large inequalities, is anything but flat. Empirical evidence shows that sizable and lasting differences in income per capita and unemployment rates exist at very different spatial scales (country, region, city, and neighborhood). In brief, the fundamental question of spatial economics is to explain the existence of peaks and valleys in the spatial distribution of wealth and people.

Registration is not required for this event.