Edited by Charlie Karlsson, Martin Andersson and Therese Norman
Various quantitative methods and approaches have been applied to the analysis of the spatial distribution of economic activity and the underlying forces that drive this distribution. Regional science has been largely credited with the development of such analytical techniques, which include location analysis, urban complex analysis, as well as general equilibrium tools such as spatial econometric, gravity, input–output and social accounting analysis. More than frequently, these modeling tools concentrated on practical applications in regional planning, economic development and so on (Isard et al., 1998) and rather ‘sacrificed’ mainstream economic theory (at least in the opinion of economic purists) in favor of practical analysis. Indicatively, constant returns and linear production and consumption functions are popular assumptions for those criticizing the analytical rigor of these approaches, which have nevertheless contributed to the understanding of the geography of economic behavior (Cole Tanner, 2005). Subsequent theoretical advances by the new economic geography literature (e.g. Fujita et al., 1999; Puga, 1999) focused on external and internal increasing returns and transport costs and led to the development of canonical models (Baldwin et al., 2003). However, despite satisfying the rigorous tenets of mainstream economics, these ‘theoretically sound’ models have been criticized for being either too abstract or/and rather unsuitable for sound empirical analysis (Boddy, 1999).
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