ABSTRACT
Unlike the previous chapters, this chapter is more theoretical and concentrates on the spatiotemporal foundations of spatial models. To achieve this goal, we assume that regions are only influenced by their own and other regions’ past variables (no simultaneous influence). We show that this strict spatiotemporal framework results in a long-run equilibrium characterized by simultaneous spatial dependence. Note, we specifically avoid assuming spatial simultaneity in the spatiotemporal process as this would be assuming what we are trying to show. To keep the exposition as simple as possible and to expose relations among some of the common models we employ a number of assumptions such as symmetric W , constant or deterministically growing X , and no structural change over time.
