Analyzing and Accounting for Regional Economic Change

Course Info

Course Number/Code: ESD.284J (Spring 2004)
Course Title: Analyzing and Accounting for Regional Economic Change
Course Level: Graduate
Offered By: Massachusetts Institute of Technology (MIT)
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Department: Urban Studies and Planning
Course Instructor(s): Prof. Karen R. Polenske
Xiaodong Wang
Course Introduction:
Syllabus Prerequisites

Introductory economics class or permission of professor.

Class Description

In this class, we focus on alternative ways in which the issues of growth, restructuring, innovation, learning, and accounting and measurements can be examined in industrialized and emerging countries, covering the following.

We survey neoclassical as well as some of the latest theories of regional growth, factor mobility, clustering, agglomeration and dispersal economies, industrial and spatial networks, industrial and regional restructuring, globalization, supply chains, learning regions, and regional centers of innovation from a political-economy perspective. For each, we cover the basic conceptual frameworks, main assumptions, and arguments for and against the use by scholars and practitioners. We give special emphasis to recent transformations in regional economies throughout the world and to the implications these changes have for the theories and research methods used in spatial economic analyses.

We examine and evaluate critically the accounting frameworks used to measure regional economic growth and review multipliers, backward and forward linkages, supply chains, and other measures. We discuss how these concepts can be used to assess employment and environmental impacts and infrastructure investments, accounting for measurement problems, such as the underground economy. We review price indices, employment and industrial location measures, and shift-share analyses. Note that we discuss U.S. and foreign applications of the theories, accounts, and techniques.

Students are expected to have had a thorough introduction to the relevant microeconomic, macroeconomic, and political economy theories prior to taking this class. Half of the problem sets are short essays or literature reviews on specific regional theories, and the other half cover important quantitative techniques used in the regional planning field.

Readings will relate mainly to the United States, but we cover pertinent material on foreign countries in lectures. In cases where other classes are available in our department that cover the material in more depth, such as project evaluation, benefit-cost analysis, urban economics, and municipal and public finance, we have either covered the topic only briefly here or omitted it entirely. These are important areas of study, and students interested in specializing in regional and urban economics should take an entire class in them.

Class Requirements

Weekly Readings

Students are expected to do the required readings listed in the class outline prior to attending a lecture and are urged to raise opposing points of view in class as well as in person with the staff. Required readings are on reserve at Rotch Library. Some of the readings can be skimmed; others should be read with care. Guidance on this will be provided as the semester proceeds. Students are expected to use suggested readings for later reference. They are not required during the semester. Ph.D. students expecting to take general exams in Regional and Urban Economics should refer to the exam syllabus for any additional readings they need to cover. Because many of the suggested readings are intended only for advanced students, they are not available in the reader.

Students specializing in regional economics may want to buy one or more of the following books.

Bendavid-Val, Avrom. Regional and Local Economic Analysis for Practitioners. New York, NY: Praeger Publishers, 1991.

Hirschman, Albert O. The Strategy of Economic Development. Boulder, CO: Westview Press, 1988. (It is currently out-of-print.)

Isard, Walter, Iwan J. Azis, Matthew P. Drennan, Ronald E. Miller, Sidney Saltzman, and Eric Thorbecke. Methods of Interregional and Regional Analysis. Brookfield, VT: Ashgate, 1998.

Krugman, Paul. Geography and Trade. Cambridge, MA: The MIT Press, 1991.

———. Development, Geography, and Economic Theory. Cambridge, MA: The MIT Press, 1995.

Malizia, Emil E., and Edward J. Feser. Understanding Local Economic Development. New Brunswick, NJ: Center for Urban Policy Research, 1999.

Markusen, Ann R. Regions: The Economics and Politics of Territory. Totowa, NJ: Rowman, and Littlefield, 1987.

Miller, Ronald E., and Peter D. Blair. Input-Output Analysis: Foundations and Extensions. Englewood Cliffs, NJ: Prentice-Hall, Inc., 1985.

Richardson, Harry W. Regional Economics. Urbana, IL: University of Illinois Press, 1979.

Rodrik, Dani. Has Globalization Gone Too Far? Washington, DC: Institute for International Economics, 1997.

U.S. Department of Labor, Bureau of Labor Statistics. BLS Handbook of Methods. Bulletin 2490. Washington, DC: U.S. Government Printing Office, April 1997.

Problem Sets

Five problem sets will be required. The grade for the class will be based upon the problem set scores (84 points) and upon two short presentations each student will give in class (16 points); each of the first four problem sets will receive 16 points and the last problem set will receive 20 points, for a total of 84 points. The first two problem sets will be short essays or book reviews concerning major regional theories. The next two problem sets will involve working with regional-accounting data using EXCEL spreadsheets. For the final problem set, students will be divided into several groups. Each group will choose a region and discuss a relevant issue for that region, select a theoretical perspective, and present an analysis to the class. Students will be introduced to any special computer techniques prior to their use for a problem set. Problem sets must be submitted on the day specified. Five points will be deducted for each day a problem set is late.

Please note that students are encouraged to work together on thinking about each problem set; however, each member of the group must do a fair share of the work, and for the first four problem sets, each student in the group must submit a separate answer that represents her/his own thinking. The names of the students in the group must be indicated on the answer.

There will be no midterm or final exam.

Class Evaluation

Students will be required to fill out a class evaluation during the last day of the class.