European Integration (Subject) / Chapter 10 - Location effects, economic geography (Lesson)

This lesson was created by mth.

Learn lesson

back  |  next 1 / 1

• Whats striking when you look at Europes economic geography? -        By looking at geography: o   Rich countries are located close together in the centre of Europe §  Heart of Europe: Germany, Benelux nations, France, England o   Poor Regions tend to be more peripheral -        Income of people also depends on the region (rich region= higher income)
• Why does peripherality matter? - The 12 new members have mostly an income which is below the average income of the EU15 nations -  Poorest region (in Romania) has an average income which is 28% below of the EU27 average -  Richest region (London) average income 343% higher than EU27 average
• What is the problem of a wide disparity between the diffrent levels of income? o   Social perspective §  Higher rate of unemployment-youth §  Long-term unemployment §  Lower level of investment §  Lower level of education o   Political perspective §  Fosters political disputes which can hinder cooperation (f.e.x on European Integration) è Giving poor regions opportunity to catch up is very important for EU regional policies
• Which other development comes up over the years? -        Over the years the gap between incomes during nations is narrowing o   F.ex.: Ireland went from being the poorest to one of the richest nations -        But the there is an increase between inequality within the nations o   F.ex: UK 1995 has two regions with above average income (Scotland & London); in 2005 only one region (London) left
• Did the integration progress been accompanied by industrial relocations? -        European Integration has been accompanied by only modest relocation of industry among nations -        The only little movement one can see is that manufacturing activities have become more geographically dispersed -        Most EU nations have become more specialized on a sector-by-sector basis
• What is the Krugmann-Index? -        Shows how specialized a country is on its best sector -        Table (p.246) shows, that most nations getting more specialized by entering the EU -        Only Spain adapts to the EU15 average with less specialization than the following states
• Explain David Ricardos theory of comparitive advantage. -> Explains why nations have become more specialized while at the same time income differences have narrowed   -  Opening up trade barriers higher the economic efficiency of each country - Trade allows nations to do what they do best and import the rest -> Comparative advantage (David Ricardo) ->Liberalization encourages nation-by-nation specialization David Ricardo: -        Countries should specialize on things they are the best at -        Positive effect of specialization
• Explain the Heckscher-Ohlin theory of comparative advantage -        A country should always produce those goods, where a factor of the production is abundant -> Even with one country having the absolute advantage in producing all goods, other countries still have comparative advantage in producing goods for export

back  |  next 1 / 1