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Economic Activity Across Space: A Supply and Demand Approach

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  • Treb Allen
  • Costas Arkolakis

Abstract

What do recent advances in economic geography teach us about the spatial distribution of economic activity? We show that the equilibrium distribution of economic activity can be determined simply by the intersection of labor supply and demand curves. We discuss how to estimate these curves and highlight the importance of global geography – i.e. the connections between locations through the trading network – in determining how various policy relevant changes to geography shape the spatial economy.

Suggested Citation

  • Treb Allen & Costas Arkolakis, 2022. "Economic Activity Across Space: A Supply and Demand Approach," NBER Working Papers 30598, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:30598
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    Cited by:

    1. Luke Heath Milsom, 2023. "Moving OpportunityLocal Connectivity and Spatial Inequality," CEPREMAP Working Papers (Docweb) 2303, CEPREMAP.
    2. Christian Glocker & Matteo Iacopini & Tam'as Krisztin & Philipp Piribauer, 2023. "A Bayesian Markov-switching SAR model for time-varying cross-price spillovers," Papers 2310.19557, arXiv.org.
    3. Piribauer, Philipp & Glocker, Christian & Krisztin, Tamás, 2023. "Beyond distance: The spatial relationships of European regional economic growth," Journal of Economic Dynamics and Control, Elsevier, vol. 155(C).

    More about this item

    JEL classification:

    • F1 - International Economics - - Trade
    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General

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