The uneven geographical distribution of economic activities is a
huge challenge worldwide and also for the European Union. In
Krugman's New Economic Geography economic systems have a simple
spatial structure. This book shows that more sophisticated models
should visualise the EU as an evolving trade network with a
specific topology and different aggregation levels. At the highest
level, economic geography models give a bird eye's view of spatial
dynamics. At a medium level, institutions shape the economy and the
structure of (financial and labour) markets. At the lowest level,
individual decisions interact with the economic, social and
institutional environment; the focus is on firms' decision on
location and innovation. Such multilevel models exhibit complex
dynamic patterns - path dependence, cumulative causation,
hysteresis - on a network structure; and specific analytic tools
are necessary for studying strategic interaction, heterogeneity and
nonlinearities.
General
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