Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/213863
Authors: 
Becker, Raphael Niklas
Henkel, Marcel
Year of Publication: 
2020
Series/Report no.: 
DICE Discussion Paper 331
Abstract: 
We discuss the role of key regions in spatial development. Local productivity shocks can affect the entire economy as they expand via tight connections in the domestic production network and in uence the geographical allocation of labor. In particular, we identify the set of key regions with the highest potential to affect aggregate productivity, output, and welfare. Key regions are central locations with strong spatial linkages in the production network but are not too large and congested so they can still attract additional labor in response to positive productivity shocks without local rents and input costs rising too much. Using a spatial equilibrium model and data from German districts, we find that a relatively modest development of productivity in key regions lowered German output and welfare growth by a factor of two from 2010 to 2015.
Subjects: 
Regional trade
Input-output linkages
Labour mobility
Spatial economics
Economicgeography
Regional productivity
Sectoral productivity
JEL: 
R10
R12
R15
F10
F1
F16
O4
O51
ISBN: 
978-3-86304-330-8
Document Type: 
Working Paper

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