Geographical Economics and Urban Competitiveness: A Critique

GEOGRAPHICAL ECONOMICS AND URBAN COMPETITIVENESS: A CRITIQUE.

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“GEOGRAPHICAL ECONOMICS AND URBAN COMPETITIVENESS: A CRITIQUE.”

30/01/2017

* Since the late 80's. Paul Krugman has been one of the most outstanding economists.

* He was interested in integrating regional studies and urban studies into economic geography.

* Was interested in incorporating geography and space into formal economic models of trade and competitiveness.

* Took the concept of trade as a comparative advantage. Emphasizing increasing returns to scale.

* Challenged the popularity of the notion of competitiveness in world markets such as national prosperity and the threat of cheap labor in developing countries.

* "Krugman is engaged in a form of neo-colonialism" (Dymski, 1996, p.439)

* In the absence of perfect competition, it is impossible, using what had been conventional, economic models to obtain a balance.

* "Major development economists failed to turn their intuitions into clear cut models that could serve as a lasting discipline" (Krugman 1995, page 24).

* In the 1940s and 1950s a core of ideas emerged in relation to external economies, complementarity and economic development that remain intellectually valid and can continue to have practical applications.

* Changes to the economy have recently taken place.

* In terms of the failure of the economy, space must be taken into account and explanations must be provided for spatial agglomeration or location of economic activity.

* The failure of the dominant economy lies in the development of localization models.

* In contrast, in a world consisting of a homogeneous, featureless plain, with no economies of scale but subject to transport costs, economic activity would itself be evenly spread across the pain in order to avoid any transport cost.

* The answer of the distrubution of a natural resources as with depeloment economics, relates to market structure in the face of increasing returns, the need to deal with scale economies and oligopolistics firms.

* The approaches from within traditional economic geography and localitation theory, fedies formal modelling due to the problems which space poses in terms of increasing returns to market structure.

* Central place theory argued that the tradeoff between econimies of scale and transport cost leads producers to cluster toguether into a hexagonal market áreas or a hierarchy of nested market áreas.

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