Agglomeration and Trade Revisited
Gianmarco I.P. Ottaviano
Bocconi University - Department of Economics and Paolo Baffi Centre on Central Banking and Financial Regulation
Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE); Centre for Economic Policy Research (CEPR)
CEPR Discussion Paper Series Number 1903
The purpose of this paper is two-fold. First, we present a model of agglomeration and trade that displays the main features of the recent economic geography literature, while allowing for the derivation of analytical results by means of simple algebra. Second, we show how this framework can be used to tackle the following important issues: (i) the impact on agglomeration of alternative pricing policies used in the space-economy, with a special focus on the distinction between segmented and integrated markets; (ii) a forward-looking approach to the dynamics of migration in the process of agglomeration, instead of the simple Marshallian model used so far in the economic geography literature.
JEL Classification: F12, L13, R13working papers series
Date posted: September 25, 1998
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