The peripherality of EU regions : a quantitative evaluation based on economic concepts

Abstract

Economics is the study of how scarce resources, including human, physical and technological capital, are allocated between competing uses towards the production of goods and services. This typically involves an assessment of supply capabilities and demand patterns, with prices acting as a signal for resources to move into the most productive and socially desirable applications. Cases of market failure where prices do not effectively perform these functions are notorious, arising out of the existence of external effects and the presence of market imperfections, which may result in an inefficient allocation of resources and an inequitable distribution of income. These instances underpin the economic justification for government intervention in the economy aimed at improving the allocation of resources towards improving social welfare.