'''Economic geography''' is the study of the widely varying economic conditions across the
earth. The economics of a geographical area can be influenced by climate, geology, and socio-political factors. Geology can affect resource availability, cost of transportation, and land use decisions. Climate can influence natural resource availability (particularly agriculture and forestry products), and working conditions and productivity. The social and political institutions that are unique to a region also have an impact on economic decisions.
These aspects of economics were noted by
Adam Smith in
The Wealth of Nations and have also been studied by modern economists like
David Landes at
Harvard University and the 20th century economist
Ellsworth Huntington.
This can be contrasted with
spatial economics or
locational economics which looks at these questions from a microeconomic perspective. Instead of ascribing
locational decisions to geography, it typically uses more abstract variables like distance or travel time. Economic geography has fallen out of favour in recent decades with most economists switching to "spatial economics" methods.
Ellsworth Huntington, a professor of economics at
Yale University in the early
20th century noted that the Northern, cold regions like the U.S., Britain, Europe and Japan had large, well-developed economies while the hot, tropical countries were less well endowed—the so-called equatorial paradox. Huntington ascribed the differences in economic performance to differences in
climate. Many economists are uncomfortable with this idea.
According to Huntington, these differences in economic performance also affected political structures—tropical states tend to have unstable political histories.
Other factors in this model affecting economic performance are access to the sea and the presence of raw materials like oil.
Singapore, for example, occupies a key position as a seaport, while the wealth of
Saudi Arabia depends almost entirely on
oil.
See also
es:Geografía_económica
fr:Géographie économique
ja:経済地理学
fi:Talousmaantiede
Category:Economic geography