Abstract

http://ssrn.com/abstract=259780
 
 

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The Empirical Relevance of the New Economic Geography: Testing for a Spatial Wage Structure in Germany


Harry Garretsen


Utrecht University - Utrecht University School of Economics; CESifo (Center for Economic Studies and Ifo Institute); Radboud University Nijmegen - Department of Economics

Steven Brakman


University of Groningen - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Marc Schramm


Utrecht University - Faculty of Law

December 2000

CESifo Working Paper Series No. 395

Abstract:     
In this paper we want to shed some light on the empirical relevance of the new economic geography. Using one of the central features of the core new economic geography models, namely that wages have the tendency to fall the further one moves away from centres of economic activity, we investigate the existence of a spatial wage structure for post-unification Germany. We find support for a spatial wage structure for German city-district wages, and hence indirectly for the relevance of a new economic geography model for Germany. We also find that demand linkages in Germany are strongly localised and that the "old" border still matters to the extent that economic interactions between western and eastern Germany are still limited compared to the situation within these two parts of Germany.

Number of Pages in PDF File: 24

Keywords: New Economic Geography, Spatial Wage Structure, Germany

JEL Classification: F12, F15, R12

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Date posted: February 26, 2001  

Suggested Citation

Garretsen, Harry and Brakman, Steven and Schramm, Marc, The Empirical Relevance of the New Economic Geography: Testing for a Spatial Wage Structure in Germany (December 2000). CESifo Working Paper Series No. 395. Available at SSRN: http://ssrn.com/abstract=259780

Contact Information

Harry Garretsen (Contact Author)
Utrecht University - Utrecht University School of Economics ( email )
Kriekenpitplein 21-22
Adam Smith Building
Utrecht, 3584 EC
Netherlands
+31 0 30 253 9810 (Phone)
CESifo (Center for Economic Studies and Ifo Institute)
Poschinger Str. 5
Munich, DE-81679
Germany
HOME PAGE: http://www.cesifo.de
Radboud University Nijmegen - Department of Economics ( email )
Nijmegen, 6500 HK
Netherlands
+31 24 361 5889 (Phone)
+31 24 361 1846 (Fax)
Steven Brakman
University of Groningen - Department of Economics ( email )
P.O. Box 800
9700 AV Groningen
Netherlands
+31 50 363 3746 (Phone)
+31 50 363 3730 (Fax)
CESifo (Center for Economic Studies and Ifo Institute)
Poschinger Str. 5
Munich, DE-81679
Germany
Marc Schramm
Utrecht University - Faculty of Law ( email )
Janskerkhof 3
Utrecht, 3512 BK
Netherlands
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