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Spatial equilibrium in deviations: An application to skill‐premium and skill‐mix heterogeneity
Author(s) -
Accetturo Antonio,
Dalmazzo Alberto,
Blasio Guido
Publication year - 2019
Publication title -
journal of regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.171
H-Index - 79
eISSN - 1467-9787
pISSN - 0022-4146
DOI - 10.1111/jors.12418
Subject(s) - exploit , benchmark (surveying) , flexibility (engineering) , variety (cybernetics) , simple (philosophy) , computer science , representation (politics) , econometrics , general equilibrium theory , economics , mathematical optimization , microeconomics , mathematics , artificial intelligence , philosophy , computer security , management , geodesy , epistemology , politics , political science , law , geography
In this paper, we propose a novel—and general‐purpose—modeling approach. We give a linear representation of the spatial general equilibrium, expressed in terms of local percentage deviations from the benchmark case of symmetry, where all the areas in the economy are taken to be initially identical. To illustrate the flexibility of our approach, we revisit the literature on the spatial heterogeneity of local skill premia and local skill mix. We show that our approach is able to encompass a variety of alternative explanations in a simple “unifying framework.” Finally, we exploit a graphical version of the model to show how to implement empirical tests.