Introduction

This course is a course focusing on spatial general equilibrium model. In week 1-7, we will go through the basics of static quantitative spatial equilibrium model step by step in details using two examples and get students know how to implement it including model construction, model estimation, and counterfactual solution. In week 8-10, we will go through dynamic spatial model. In week 11, students are going to present their own research proposals. The proposals should be related to the materials they learned in the course. Students taking this course are expected to have a solid first year macro, micro, and econometrics background. It would be better if they have learned quantitative skills on international trade and DSGE models.

 

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Content

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Week 1: Introduction to Models in Spatial Economics (I)  Slides for Week 1-4

What is quantitative spatial general equilibrium model, how to implement it

A thorough investigation of Fang et al (2024): Motivation, Model building

 

Week 2: Introduction to Models in Spatial Economics (II)

What is quantitative spatial general equilibrium model, how to implement it

A thorough investigation of Fang et al (2024): Estimation, Calibration, Counterfactual

 

Week 3: Introduction to Models in Spatial Economics (III)

What is quantitative spatial general equilibrium model, how to implement it

A thorough investigation of Fang et al (2024): Estimation, Calibration, Counterfactual

 

Week 4: Introduction to Models in Spatial Economics (IV)

What is quantitative spatial general equilibrium model, how to implement it

A thorough investigation of Fang et al (2024): Estimation, Calibration, Counterfactual​

 

Week 5: Models with Goods Trade    Slides for Week 5

A discussion on Armington model, Eaton and Kortum (2002), and Caliendo and Parro (2015)

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Week 6: Diamond Style Model in Urban Economics (I)

A discussion on Diamond (2016) and Ge et al. (2025)

 

Week 7: Diamond Style Model in Urban Economics (II)

A discussion on Ge et al. (2025) and the code to solve the model equilibrium

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Week 8: Dynamic Spatial Equilibrium (I)

A discussion on Caliendo, Dvorkin and Parro (2019) and Kleinman, Liu, and Redding (2023)

 

Week 9: Dynamic Spatial Equilibrium (II)

A discussion on Caliendo, Dvorkin and Parro (2019) and Kleinman, Liu, and Redding (2023)

 

Week 10: Dynamic Spatial Equilibrium (III)

A discussion on Caliendo, Dvorkin and Parro (2019) and Kleinman, Liu, and Redding (2023)

 

 

References:

Fang et al (2024) Place-based Land Policy and Spatial Misallocation: Theory and Evidence from China

Eaton and Kortum (2002) Technology, Geography and Trade

Caliendo and Parro (2015) Estimates of the Trade and Welfare Effects of NAFTA

Diamond (2016) The Determinants and Welfare Implications of US Workers’ Diverging Location Choices by Skill 1980-2000

Ge et al. (2025) Effect of Technology on Migration and Social Welfare in China: A General Equilibrium Approach

Caliendo, Dvorkin and Parro (2019) Trade and Labor Market Dynamics General Equilibrium Analysis of the China Trade Shock

Kleinman, Liu, and Redding (2023) Dynamic Spatial General Equilibrium