Testing the 'new economic geography': a comparative analysis based on EU regional data

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  • 1 January 2005
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      • Published in RePEc
Abstract
This paper evaluates 'new economic geography' theory by comparing it with a competing non-nested model derived from urban economics. Using bootstrap inference and the J-test, the paper shows that while NEG theory is supported by the data, it needs to be modified to achieve this, and it is not the only, or even the best or simplest, explanation of regional wage variations across the EU.
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