Increasing returns and spatial unemployment disparities

Abstract

"Standard models of the new trade and location theories usually assume full employment and are thus ill-equipped to study spatial unemployment differences, which in reality are more pronounced that income disparities. Regional labour market theories like the 'wage curve'-approach on the other hand can not endogenously explain the origin of regional economic disparities. The author analyses regional agglomeration and regional unemployment in an unified approach by combining a wage curve with an increasing returns technology. He finds that regional unemployment rates closely resemble the coreperiphery structure of regional GDP per capita. This matches the stylised facts from EU-15." (Author's abstract, IAB-Doku) ((en))

Cite article

Südekum, J. (2003): Increasing returns and spatial unemployment disparities. (Universität Göttingen, Volkswirtschaftliches Seminar. Diskussionsbeiträge 117), Göttingen, 35 p.