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This chapter discusses the theory and empirics of social interactions, with particular emphasis on the role of social context in individual decisions. It begins by introducing a sequence of models that highlight applications in different empirical social interaction settings, including a simple static model that is used to link social interactions theory with social networks theory, notably random graph theory. A dynamic model, where the social structure accommodates a variety of social interaction motives, is then described and solved as a dynamic system of evolving individual actions. The solution links social interactions theory with spatial econometrics. The chapter examines the econometrics of social interactions in social networks and social learning in urban settings before concluding with a review of the literature on social interactions in economics.

This chapter examines the empirics of urban structure and evolution. It first considers Zipf's law for cities and the vibrant exchanges both over theory and empirics pertaining to it. It then discusses the Duranton model that explains three empirical regularities regarding endogenous city formation: a stationary law for city size distributions that is skewed to the right; churning of industries across cities as cities experience rapid changes in their industrial compositions; and the pattern of urban size transitions. The chapter also explores the empirics of urban transitions by focusing on models of urban evolution that allow for general intradistributional dependence; the hierarchy principle of industrial diversity; the link between geography and spatial clustering; and studies of urban structure based on “quasi-natural experiments.” Finally, it assesses global aspects of city size distribution and its evolution.

This chapter examines the link between intercity trade and long-run urban growth. It begins by introducing a Ventura-type model of the growth of isolated cities that allows for investment in physical capital and in urban transportation as ways to increase urban productive capacity. It then considers a sample of growth empirics for the United States, European, and Brazilian systems of cities with an emphasis on transportation improvements and factor accumulation. It also describes a model of economic growth in a system of cities that leads to a precise description of the law of motion in dynamic settings of either autarkic cities or specialized cities engaged in intercity trade. Finally, it explores the interrelationships between economic integration, urban specialization, and growth; the Rossi-Hansberg–Wright model of urban structure and its evolution; empirical aspects of urban structure and long-run urban growth; and sequential urban growth and decay.

This chapter provides a methodological approach that draws lessons and insights from economic history and theory and uses empirics from economic analysis and policy practice. It starts with an observation of the increasingly globalized world economy in which technological development allows the use of factors of production in locations that maximize returns and utility, and countries gain mutually by trading with each other if their strategies focus on revealed and latent comparative advantage. By following carefully selected lead countries, latecomers can emulate the leader–follower, flying-geese pattern that has well served economies since the eighteenth century. The prospects for sustained and inclusive growth are even greater for low-income economies that enjoy the benefits of backwardness. The chapter advocates implementing viable strategies to capture new opportunities for industrialization, which can enable low-income economies to set forth on a dynamic path of structural change and lead to poverty reduction and prosperity.

This chapter describes the three-facet model of causality. Facet 1 consists of three models of causes: the categorical model (absolute or binary), the probabilistic model (dimensional or continuous), and the emergent model (nonlinear). The categorical model identifies causes that directly bring about an event, the categorical model involves “yes/no” reasoning, and the probabilistic model is reflected in the phrase “more/less likely.” Facet 2 shows that causality can be examined at four levels of analysis: predisposing, precipitating, programmatic, and purposive. Facet 3 outlines three distinct logics that can be used to determine cause: empiric logic, empathic logic, and ecclesiastic logic. Three examples of the four levels of cause (predisposition, provocation, programmatic, and purposive) are given: the Chernobyl nuclear disaster, the 9/11 World Trade Center building collapse, and substance use disorder.

In this chapter, foreign direct investment is further explained as a key feature of the modern globalized world. It gives a brief history of the explosion in FDI since 1985 and makes attempts at explaining the nature, causes and consequences of FDI. How FDI is being run primarily by proximity-concentration trade-off yet decreases in trade costs do not discourage it causes a paradox that becomes the organizing principle of the chapter. By outlining the simplest case of horizontal FDI, vertical FDI and cross-border mergers and acquisitions, the chapter presents a selective overview of the theory and empirics of FDI. In the end, the analysis done show that there are explanations to the paradox, however there remains a question on their relative empirical importance.

This chapter explores the distinctive features of solitary confinement and the ways in which isolation is endemic in the structure of U.S. prisons. It analyze the expansion of solitary confinement, the debate about the lawfulness of the practice in the federal courts, and recent data on the widespread use of solitary confinement in state and federal prison systems. The U.S. Supreme Court has not prohibited the practice but has licensed courts to inquire about whether a particular version imposes an “atypical and significant hardship” on an individual. If such a showing is made, then prisons must provide some procedural buffers against arbitrary placements. Nation-wide data demonstrate that more than 60,000 individuals were, as of 2018, placed in cells for 15 days or more for 22 hours or more. Almost 4,000 people have been so confined for three years or more. Solitary confinement is thus all too “typical” a facet of prison life. Its commonplace occurrence ought not insulate solitary confinement from the conclusion that it is an illicitly cruel practice that debilitates individuals. The complexity of ending solitary confinement terms not only from its widespread use but also from the ways in which U.S. prisons are committed to many practices that are isolating and disabling of individuals.

This chapter offers some research perspectives. In the realm of empirics, it discusses a twofold level of observation and examines the description of forms as a point of departure. It also looks at the observation of social norms. Next, this chapter turns to norms beyond functional differentiation and autonomy. Here, it considers Luhmann's model of the pure norm. It comments on the inevitable hybrid character of social norms as well. In addition to these remarks, the chapter turns toward the challenge of historicism and the project of a comparison of theories, after which it discusses two perspectives on normativity succeeding—over-normativization and under-normativization.