Complexity and geographical economics: topics and tools - volume 19

The uneven geographical distribution of economic activities is a huge challenge worldwide and also for the European Union.

In Krugman's New Economic Geography economic systems have a simple spatial structure.

This book shows that more sophisticated models should visualise the EU as an evolving trade network with a specific topology and different aggregation levels.

At the highest level, economic geography models give a bird eye's view of spatial dynamics.

At a medium level, institutions shape the economy and the structure of (financial and labour) markets.

At the lowest level, individual decisions interact with the economic, social and institutional environment; the focus is on firms' decision on location and innovation.

Such multilevel models exhibit complex dynamic patterns - path dependence, cumulative causation, hysteresis - on a network structure; and specific analytic tools are necessary for studying strategic interaction, heterogeneity and nonlinearities.