The research agenda addresses regional disparities and their policy implications from different topical and methodological angles. While regional economics has been an established self-contained field for decades, research questions with a regional focus have become more prevalent in other sub-fields only recently. The increasing availability of data at fine geographical grids and methodological advancements have paved the road to study numerous questions from a new angle. Sub-fields bring in expertise in economic theory, structural and reduced form-analysis econometrics. Research projects within the RTG will rely on innovations in data and state-of-the art methods.
Understanding the determinants of regional disparities defines the major focus. We explore these reasons in three interdependent categories, namely efficiency, amenities and frictions. While research in each of these categories has numerous policy implications, we add a separate fourth category called public policy to address general policy fields related to regional disparities.
Regions differ with respect to productivity or efficiency resulting in large differences in per-capita income. The first category explores the origins of these efficiency disparities, e.g. innovation and knowledge spillovers, matching and sorting of workers, health or (digital) infrastructure.
…affect the preferences for living in a particular area and can be understood broadly as the local climate and environment, but also as the quality and quantity of local public goods, better and/ or cheaper housing, and family ties. Moreover, amenities can also be negative (disamenities) when production causes pollution or agglomeration leads to congestion externalities.
…make economic transactions more expensive and thereby hinder full convergence of economic outcomes. We discuss, among other topics, trade and commuting costs, search and matching costs, and limitations to worker mobility.
Essentially all the above research questions of the first three categories have direct policy implications. In addition, the first three categories are mutually interdependent and therefore we cover broader classes of policies like place-based policies or the design of social security systems that touch upon efficiency aspects, amenities and frictions. In doing so, we aim to take the interdependencies between the first three categories into account.