Spatial Equilibrium in Deviations: An Application to Skill‐Premium and Skill‐Mix Heterogeneity

18 Pages Posted: 29 May 2020

See all articles by Antonio Accetturo

Antonio Accetturo

Bank of Italy

Alberto Dalmazzo

University of Siena - Department of Economics

Guido de Blasio

Bank of Italy

Date Written: September 2019

Abstract

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.

Keywords: local wage structure, spatial general equilibrium

Suggested Citation

Accetturo, Antonio and Dalmazzo, Alberto and de Blasio, Guido, Spatial Equilibrium in Deviations: An Application to Skill‐Premium and Skill‐Mix Heterogeneity (September 2019). Journal of Regional Science, Vol. 59, Issue 4, pp. 615-632, 2019, Available at SSRN: https://ssrn.com/abstract=3611103 or http://dx.doi.org/10.1111/jors.12418

Antonio Accetturo (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Alberto Dalmazzo

University of Siena - Department of Economics ( email )

Piazza S. Francesco, 7
Siena, I-53100
Italy
+39 0577 232 697 (Phone)

Guido De Blasio

Bank of Italy ( email )

Via Nazionale 91
00184 Roma
Italy

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