Dynamics in economic geography 2e druk - Ton van Rietbergen, Sierdjan Koster

1 | What is economic geography?

With this in mind, we can give a somewhat more encompassing definition of economic geography: Economic geography studies the mutual relationship between the actions of people, firms and governments and the socio-economic context on different spatial scales. This translates into two overarching questions that form the core of economic ge ography: 1 What drives the spatial decisions of firms, people and governments as the main agents? 2 Why are some places more prosperous – in a broad sense – than others? These two questions underlie the structure of this book and they are addressed from a variety of perspectives: from a neoclassical, behavioural, institutional and evolutionary perspective, as well as from the perspective of New Economic Geog raphy. While economic geography has a solid theoretical foundation, it is in the end an applied science. This means that economic geography knowledge has to be ‘useable’ for government and industry. In essence, policies are aimed at optimizing spatial patterns in prosperity, and using the insights from these two main questions, advice can be given on how to influence decisions and, in the end, regional patterns of development. The second question may then be followed by ‘… and what can we do about it?’ In this chapter we will discuss the rediscovery of economic geography (Section 1.1) and geographic concepts such as location, distance and networks (Section 1.2). This is followed by the relationship between economic geography and industry and en vironment (Section 1.3). In 2009, the World Development Report , published annually by the World Bank, was entitled Reshaping Economic Geography. The report paid particular attention to the role played by the physical environment. It is clear that geographic factors are of great importance to the World Bank in explaining economic differences between both nations and regions. Another sign of increasing interest in the influence of geography on economic issues is the fact that the 2008 Nobel Prize for Economics was awarded to Paul Krugman for his analysis of trading patterns and locations of economic activity. During the period following World War Two, geography as an academic discipline had a poor reputation. It had been brought into disrepute by the Nazi regime that The rediscovery of economic geography

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