The Baltic Sea region is one of the most socially, economically and technologically developed regions in the world. The region has a high GDP level, limited social inequality in a global context, leading positions in Doing Business and Global Competitiveness indeces. Meanwhile, the region is...

Should the national government undertake policies aimed at strengthening the economies of particular localities or regions? Agglomeration economies and human capital spillovers suggest that such policies could enhance welfare. However, the mere existence of agglomeration externalities does not...