Spatial Scenarios in a Global Perspective

Spatial Scenarios in a Global Perspective

Europe and the Latin Arc Countries

New Horizons in Regional Science series

Edited by Roberto Camagni and Roberta Capello

This up-to-date and insightful book presents post-crisis scenarios for European regions with new methodologies and tools to support quantitative assessment and foresight. The aim is to develop regional forecasting methodologies and tools, appropriate to the regional-local scale but consistent with a general EU-wide approach. This effort is particularly important in a period of economic crisis, as an economic downturn generates high uncertainty about the future of economic systems, and consequently will determine the new winners and losers in a globalized world.

Chapter 4: Quantitative Foresights for European Regions

Roberta Capello and Ugo Fratesi

Subjects: economics and finance, regional economics, urban and regional studies, regional economics

Extract

Roberta Capello and Ugo Fratesi 4.1 QUANTITATIVE FORESIGHTS AT REGIONAL LEVEL As mentioned in the previous chapters of this book, the world economic crisis has given rise to long-term breaks in the structural features of the economy stemming from recent emerging contradictions: demand based on debt in many advanced countries; growth of the financial sector in Western economies; Brazil, Russia, India and China (BRICs) supporting Western consumption with low-price goods; Western real income decreasing because of high inflation; and financing the US trade deficit (by buying US treasury bonds). As a consequence, at the end of the crisis, the balance of the geo-political game will be different, and winning assets will be different as well; the dollar may no longer be the sole reference currency for international exchanges; and a ‘regionalized’ globalization will take place. Needless to say, all these structural breaks will have strong effects on the possible future economic trajectories of regions in Europe. This chapter presents advanced scenario-building and simulation exercises for the devising of anticipatory and far-sighted development strategies and regional policies in an era of structural breaks brought about by the economic downturn. It describes a reference scenario, built on the assumption that structural breaks take place, a proactive scenario reflecting the hypothesis that structural changes will be perceived and even anticipated, and a defensive scenario, in which changes will not be understood by economic actors. The chapter is devoted to developing quantitative foresights on the three integrated scenarios presented in Chapter 3. In particular,...

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