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ESTIMATING A DYNAMIC SPATIAL EQUILIBRIUM MODEL TO EVALUATE THE WELFARE IMPLICATIONS OF REGIONAL ADJUSTMENT PROCESSES: THE DECLINE OF THE RUST BELT : ESTIMATING A DYNAMIC SPATIAL EQUILIBRIUM MODEL TO EVALUATE THE WELFARE IMPLICATIONS OF REGIONAL ADJUSTMENT PROCESSES: THE DECLINE OF THE RUST BEL
Cited 4 time in
Web of Science
Cited 6 time in Scopus
- Authors
- Issue Date
- 2017-05
- Publisher
- Blackwell Publishing Inc.
- Citation
- International Economic Review, Vol.58 No.2, pp.473-497
- Abstract
- © (2017) by the Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research AssociationThis article develops and estimates a new dynamic spatial equilibrium model to study the regional transition dynamics and its impact on individual and aggregate welfare. The model consists of a multiregion, multisector economy comprised of overlapping generations of individuals with heterogeneous skills and mobility costs. The empirical findings suggest that a large fraction of the decline of the Rust Belt can be attributed to the reduction in its region-specific comparative advantage in the goods-producing sector. This decline generated significant differences in welfare across regions. Policy experiments show that such inequality can be significantly reduced through place-based policies.
- ISSN
- 0020-6598
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