New Directions in Economic Geography

New Directions in Economic Geography

New Horizons in Regional Science series

Edited by Bernard Fingleton

This important book explores original and alternative directions for economic geography following the revolution precipitated by the advent of so-called ‘new economic geography’ (NEG). Whilst, to some extent, the volume could be regarded as part of the inevitable creative destruction of NEG theory, it does promote the continuing role of theoretical and empirical contributions within spatial economic analysis, in which the rationale of scientific analysis and economic logic maintain a central place. With contributions from leading experts in the field, the book presents a comprehensive analysis of the extent to which NEG theory is supported in the real world. By exploring whether NEG theory can be effectively applied to provide practical insights, the authors highlight novel approaches, emerging trends, and promising new lines of enquiry in the wake of advances made by NEG.

Chapter 9: A Methodology for Evaluating Regional Political Economy

Paul Plummer and Eric Sheppard

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

Extract

Paul Plummer and Eric Sheppard 9.1 INTRODUCTION Econometricians conceptualize (the economic) system as a complex, non-linear, interdependent, multivariate, disequilibrium dynamical process dependent on agents’ expectations and their adjustments, subject to random shocks, and involving many phenomena that are unobservable; relevant time-series data are inaccurate and exist for only short periods and for a few major variables; economic theories are highly simplified abstractions usually of a comparative statics form invoking many explicit ceteris paribus clauses (with yet others implicitly required), most of which are invalid in empirical applications – little wonder that our macroeconomic representations are less than perfect. David Hendry, (1980, p. 399) Econometrics – Alchemy or Science Compared with the situation faced by economic geographers, econometricians get off lightly. We would add to the above list: problems of spatial interdependencies and spatial heterogeneity; theories that range across many more disciplines than economics and that cannot be reduced to agents’ behaviour; the additional challenges of constructing spatio-temporal data sets; and a lack of disciplinary consensus on ontology, epistemology and methodology. In this chapter, we take up this challenge by investigating what it means to carry out spatial modelling in contemporary economic geography. Specifically, we focus on the challenges posed by the complexity of spatio-temporal dynamics for our understanding of the evolving economic landscape. We highlight the ways in which competing conceptions of the capitalist space economy handle this complexity in terms of both bridging the gap between theory and model (analytical adequacy) and in terms of bringing observation to bear...

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