Dynamic spatial econometrics models: A critical review

Abstract

This paper takes a constructively critical view of spatial econometrics, focussing on the advantages of a dynamic spatial panel modelling approach. The paper acknowledges that various criticisms have been made of spatial econometrics, and shows how the model approach adopted provides a response to some of these. As an example the efficacy of dynamic spatial panel modelling, simulations highlight fundamental contrasts between prospective employment levels in different regions of the European Union.