Economic Geography [ LECON2314 ]

Basic notions of microeconomics and econometrics taught at the Bachelor level.

The course will be built around three distinct parts, the first one focused on economic geography, the second one on urban economics and the third one on regional policies. Theoretical and empirical approaches will be continuously alternated. Specific topics, such as, for example, the spatial consequences of the European integration or NAFTA, spatial wage disparities in China, competitiveness clusters policies in Belgium and in France or EU structural funds will be treated.

The aim of this course is to provide students with theoretical and empirical tools necessary to understand why the location of economic activities is uneven across space within countries. At the end of the term, the students should be able to discuss the existence, the causes and the consequences of regional inequalities.
The primary goal of this course is not to focus on the technical aspects of the models or of the econometric techniques of the papers that will be presented. The students are rather expected to understand the concepts and the mechanisms behind, so as to integrate them in argumentative discussions about issues related to economic integration and local development.
 

A mid-term homework will account for 50% of the final grade. It will probably consist of a critical review of a recent research paper. Students will work by pairs.
A final exam, consisting of an essay written individually, will account for the other half of the final grade.
 

The course will be given ex-cathedra by the professor and will alternate presentations of theoretical mechanisms and discussions of their empirical relevance.

Economic geography: This first part is focused on the macro-foundations of regional inequalities. The tradeoff between increasing returns to scale and transport costs will be analyzed in details, through the presentation of the seminal models of economic geography proposed by Krugman (1991) and Krugman and Venables (1995). The empirical relevance of these models will be discussed.
Urban economics: This second part is focused on the micro-foundations of regional inequalities. The role of industrial clusters and external economies of scale will be analyzed, so as to shed new theoretical and empirical light on the productivity and wage premia observed in denser areas.
Regional policy: The third part of the course will be dedicated to the study of the equity/efficiency dilemma at the heart of any regional policy, and to the evaluation of some regional policies such as EU structural funds.
 

Economic geography, P.P. Combes, T. Mayer and J. Thisse, Princeton University Press.

Economie géographique, P.P. Combes, T. Mayer and J. Thisse, Economica