Many questions in urban and regional economics can be characterized as including both a spatial and a time dimension. However, often one of these dimensions is neglected in empirical work. This paper highlights the danger of methodological inertia, investigating the effect of neglecting the...

We propose a new unified approach to identifying and estimating spatio-temporal dependence structures in large panels. The model accommodates global crosssectional dependence due to global dynamic factors as well as local cross-sectional dependence, which may arise from local network structures....