Key Concepts in Economic Geography and Globalization

Agglomeration Economies

The benefits, efficiencies, or savings that are derived from the spatial clustering of economic activities, particularly firms and populations.

Appalachian Regional Commission (ARC)

A federal-state partnership created in 1965 with the goal of increasing job opportunities and per capita income in the Appalachian region and improving its infrastructure.

Central Business District (CBD)

The commercial and often geographic heart of a city, traditionally characterized by high density of businesses and jobs.

Comparative Advantage (CA)

An economic principle that justifies trade between nations, stating that countries should specialize in producing goods and services in which they have an inherent advantage for export, and import goods in which they do not.

Concentration (Economic Geography)

One of the four main features of economic geography, referring to the observation that most economic activity is concentrated on a very small fraction of land globally and within regions.

Economic Geography

The study of variation in economic activities, outcomes, and performance across different cities, regions, and countries.

Economies of Scale

Advantages gained by producing goods in high volume, where the average cost per unit of output decreases as the scale of production increases.

Erie Canal

A historic canal completed in 1825 by New York State, connecting New York City to the Great Lakes, which significantly reduced transportation costs and boosted economic development along its route.

First Era of Globalization (1840 - WWI)

A period of increased international trade primarily driven by differences in natural endowments (comparative advantage), with trade occurring between dissimilar and often distant countries.

Globalization

The process by which the world has become increasingly interconnected through increased trade, knowledge, and cultural exchange among nations.

Information Spillovers

The flow of knowledge and ideas between firms and individuals, often facilitated by close geographic proximity, contributing to 'learning' in localization economies.

Intermediate Goods

Semi-finished goods or goods used as an input in the production of some other final good.

Intra-industry Trade

The exchange of broadly similar goods and services between countries, characteristic of the second wave of globalization, often driven by product differentiation.

Localization Economies

Industry-specific benefits that firms gain from clustering together in space, such as access to specialized inputs, labor markets, and information.

Matching (Localization Economies)

A benefit of clustering where firms can more easily find the specific workers they need, and workers can find jobs that match their skills, creating 'thick' labor markets.

Metropolitan Statistical Area (MSA)

A geographical area used by the U.S. government for statistical purposes, consisting of a central county with a population of at least 50,000 and adjacent counties with strong economic and social ties to the central county.

Non-localized (Non-trade) Industries

Industries where the consumption of their production occurs locally, serving the needs of the immediate region rather than for export.

Proposition 1A (2008)

The California ballot initiative that approved the issuance of $9.95 billion in general obligation bonds to partially fund an 800-mile high-speed train system.

Second Era of Globalization (1950 - Present)

A period characterized by a 'new international trade' driven by product differentiation and intra-industry trade, facilitated by falling transportation and communication costs.

Sharing (Localization Economies)

A benefit of clustering where firms of the same industry create sufficient demand for specialized inputs or suppliers to emerge, which then service the cluster.

Spatial Mismatch Hypothesis

An idea outlining how certain jobs are geographically out of reach for certain communities, often due to transportation limitations or the decentralization of employment.

Specialization (Economic Geography)

One of the four main features of economic geography, where countries and regions focus on producing different goods and services, leading to trade.

Tacit Knowledge

Knowledge that is difficult to articulate or transfer through formal means, often acquired through repetition and direct experience ('learning by doing'), and which tends to be local.

Trade

The exchange of goods and services, often between distant places or nations.

Traffic Congestion

An excess of vehicles on a portion of roadway at a particular time, resulting in speeds slower than normal, leading to longer trip times.

Turbulence (Economic Geography)

One of the four main features of economic geography, referring to the instability and changes in the economic performance of regions over time, including the rise and fall of cities and industries.

Two-way Road Problem

A potential drawback of transportation investment in lagging regions, where improved access to markets for local producers also means advanced producers gain access to the formerly isolated region, potentially leading to increased competition for local businesses.

Uneven Development

One of the four main features of economic geography, indicating that prosperity and economic outcomes differ significantly across places, such as neighborhoods, regions, or countries.

Urbanization Economies

General benefits or efficiencies that emerge for all firms by locating in spatially clustered areas like cities, such as better access to infrastructure, inter-regional transportation hubs, and business services.

Vertical Disintegration

A production strategy where different phases or tasks in the production of a good are carried out by separate, specialized firms located in various places, rather than entirely within one company.

Vertically Integrated Company

A company where all or most phases of production for a good occur 'in-house' rather than relying on external suppliers or subcontractors.