Contributed Volume as year 1 output of the Action The EU in the New Complex Geography of Economic Systems. Models, Tools and Policy Evaluation

Tentative Title: Complexity & Geographical Economics: Topics and Tools The EU in the New Complex Geography of Economic Systems. Models, Tools and Policy Evaluation Editors: Pasquale Commendatore, Saime Kayam, Ingrid Kubin

Publisher Springer «Dynamic Modeling and Econometrics in Economics and Finance» Series edited by Prof. Semmler und Prof. Mittnik.

PARTS corresponding to the working groups of the Action A. Economic geography modelling B. Institutions and markets C. Social and industrial interactions D. Mathematical and computational methods and tools.

Economic Geography Geographical distribution of economic activities across space is determined by what the literature denotes with “first nature” (determined by territorial topography, natural resources and geopolitical factors ) & “second nature” (that mainly refer to human activity and economic incentives) causes. Economic activities tend to cluster together taking advantage of proximity to larger markets, scale economies, knowledge spillovers, lower transport costs and so on.

The first 3 chapters of the book will give a survey of the state of the art in this context 1.New economic geography [Pasquale Commendatore, Ingrid Kubin, Theresa Grafeneder-Weissteiner] 2.Empirical methods applied to regional economics [Diana Mendes, Vivaldo Mendes] 3.Diffusion of Growth and Cycles in Continuous Time and Space[Tönu Puu]

Institutions and markets Institutional capacities are unevenly distributed across space at different territorial levels (EU, national, regional and local) They shape the economic structure and play a crucial role in fostering growth and reducing regional disparities. Financial markets are deeply interconnected, and at the same time have a local dimension which stresses informational advantages enjoyed by financial intermediaries located in proximity of firms. Labour markets have a spatial dimension (regionally fragmented) because labour mobility is low as a consequence of language, territorial, cultural, gender, ethnic, age and other barriers across European communities.

Chapter 4 and 5 will give a survey on financial and labour market issues 4.Complex Financial Networks and Systemic Risk: A Review [Spiros Bougheas, AlanKirman] 5.Regional income disparities, sectoral employment and productivity [Tiiu Paas, Liis Lill]

Social and industrial interactions Decisions which impact on population well-being such as labour migration movements, households residential choices as well as firms location decisions may also be affected by lower scale interrelations. We need a disaggregated analyses of multi-level spatial economic systems focusing on the interrelationship between individual location choices and the economic, social and institutional environment

Chapter 6 and 7 will contribute to these topics: 6.Industrial organization and location [Mario Pezzino, Michael Kopel] 7.From gravity to spatial models: Empirical literature on location choice of multinationals [Saime Kayam, Roberto Basile] 8.Oligopolies with R&D collaboration and diffusion along networks [Gian Italo Bischi, Fabio Lamantia]

Mathematical and computational methods and tools Spatial and geographical patterns follow complex patterns – exemplified by e.g. path dependence, cumulative causation, hysteresis on a network structure So specific mathematical and computational methods and tools are required for analysing strategic interaction, heterogeneity, complexity and nonlinear dynamics.

Chapter 8 to 12 survey some of the methods involved 9.Modelling regional economics dynamics: spatial dependence, spatial heterogeneity and non-linearities [Roberto Basile, Saime Kayam, Román Mínguez, Jose María Montero, Jesus Mur] 10.Complex Networks [Luis Miguel Varela Cabo, Giulia Rotundo, Marcel Ausloos] 11.Spatial interaction in Agent Based Modeling: A partial review [Ugo Merlone, Herbert Dawid, Marcel Ausloos] 12.Studying the effects of monetary and fiscal policy rules with an agent-based macro model [Frank Westerhoff, Reiner Franke] 13.Using An Anthropocentric Trust Management Method for Improving Agents Based Modeling in Economics [Denis Treck]

Referee Process: 1. The editors will assign to each chapter one referee from within the COST network. 2. The task of the referee is twofold: First, to write a “normal” referee report assessing the quality of the contribution. Second, to make positive suggestions in order to improve the chapter (and in order to increase the overall quality of the book). 3. The editors shall read each of the chapters providing suggestions how to improve the overall consistency of the chapters with each other.

Time table Deadline for the Chapters: June 14 Deadline for the referee reports: July 14 Deadline for the revised Chapters: August 31. Deadline for the Book: September 30.