Chapter 5 Terminology

Question 1

Economic Geography

Answer 1

is the subfield of human geography which studies economic activity, main topics are
− Economics of land use, real estate
− Location of industries
− Urbanization etc.

Question 2

New Economic Geography

Answer 2

is considered as a subfield in international economics founded by Krugman (1991) that explains spatial concentration and specializations leading to persistent regional economic disparities. Main topics are:
− (Dis)Economies of Agglomeration
− Core-Periphery Theory
− International Trade and Globalization

Question 3

Analysis of Agricultural Land Use (von Thünen, 1826)

Answer 3

The use which a piece of land is put to is a function of the cost of transport to market and the land rent a farmer can afford to pay (determined by constant yield here). This creates an economic rent created by spatial variation or location of a resource.

Question 4

The Isolated State (von Thünen, 1826)

Answer 4

The result are four concentric rings of
agricultural activity around the city of the Isolated State:
1. Dairy, vegetables and fruits
2. Forest for timer and firewood
3. Grains and other field crops
4. Ranching
Beyond that, there is only wilderness as agriculture is not profitable… This is the first serious treatment of
spatial economics and economic geography,
connecting it with the theory of land rent.

Question 5

Gravity Model of International Trade

Answer 5

Bilateral trade flows are based on the economic sizes and distance between two units. There is an overwhelming empirical evidence that trade tends to fall with distance, as e.g. depicted in the DHL Global Connectedness Index…

Question 6

Classical Location Analysis (Weber, 1909)

Answer 6

The best location of production is determined by minimizing transportation costs (i.e. goods transport, handling and other transport related logistics costs)

Question 7

market oriented industrial location

Answer 7

If we think that transportation of raw

material in bulk is cheaper than transportation of finished products (e.g. soft drink bottling plants in North America)

Question 8

material oriented industrial location

Answer 8

If we think that transportation of finished
products may be cheaper than transportation
of raw materials

Question 9

Industry Location Analysis “nowadays” (i.e. in real life)

Answer 9

• Rarely, finished products are manufactured from raw material at one location.
• RMPC (raw material procurement costs) and FPDC (finished product distribution costs) are not just linear and TTC (total transportation costs) have been declining.
• Intermediate locations for are viable when intermodal transfers may require a break-in-bulk
• Brainpower has been steadily displacing muscle and machine power.

Question 10

Core-Periphery Model (Krugman, 1991)

Answer 10

Krugman developed a general equilibrium model with two sectors and two
regions, from which two patterns of industrial location could be deduced endogenously, namely
symmetric dispersion at 50 per cent and total concentration.

Question 11

Core (urban) centres pull factors (Core-Periphery Model)

Answer 11

− High labour and capital acummulation
− Centralization of decison making leads to even more access to resource allocation
− Centralization of development, industries,
decision making
− More and better access to education
− Better social amenities

Question 12

Periphery (rural area) push factors (Core-Periphery Model)

Answer 12

− Low accumulation of capital, low productivity
− Marginalization in the policy process
− Unfair market for agricultural products
− Low socio-economic development including education

Question 13

Centripetal forces

Answer 13

− Market size effects (linkages)
− Developed (thick) labour markets
− More or less pure external economies like spillover effects
Results in agglomeration of activities; “distance still matters!”

Question 14

Centrifugal forces

Answer 14

− Immobile factors (land, natural resources)
− Land rents (and low transport costs)
− More or less pure external diseconomies like congestions, emissions, etc.
Fosters spatial spread of activities; “the world is flat!”

Question 15

Positive Feedback or Self Reinforcing Process of Spatial Agglomeration

Answer 15

Economic activity tends to
concentrate where there is
a large market, but the market is large where economic activity is concentrated…
It is then desirable to live
and work near of such an
agglomeration, because of
goods and service available,
more variety of choices and
higher income there. This leads of a positive feedback that reinforces spatial agglomeration…

Question 16

World Systems Theory (Wallerstein, 1974)

Answer 16

is a multidisciplinary, macro-scale approach to world history and social change which emphasizes the world-system (and not nation states) as the primary (but not exclusive) unit of social analysis. “World-system” refers to the inter-regional and transnational division of labor, which divides the world into core countries, semi-periphery countries, and the periphery countries.

Question 17

Core countries

Answer 17

Most developed, high income, (post)industrialized capitalist countries, wealthy states, power full government, very
attractive to immigrate to.
Have most control and benefit from globalization.

Question 18

Semi-periphery countries

Answer 18

Industrializing capitalist countries, often geographically

co-located, ongoing trend of emigration to core countries.

Question 19

Periphery countries

Answer 19

Less developed, low income countries because of lack of
access to technology, unstable government, poor education and health care systems. Exploitation of agriculture, national resources and/or cheap
labour force. Heavy pressure to emigrate, too.