Agglomeration and Trade Revisited

28 Pages Posted: 16 May 2002

See all articles by Gianmarco I.P. Ottaviano

Gianmarco I.P. Ottaviano

Bocconi University - Department of Economics and Paolo Baffi Centre on Central Banking and Financial Regulation

Takatoshi Tabuchi

University of Tokyo - Faculty of Economics

Jacques-François Thisse

Catholic University of Louvain (UCL); Centre for Economic Policy Research (CEPR)

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Abstract

The purpose of this article is twofold. First, we present an alternative 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 permit (i) a welfare analysis of the agglomeration process, (ii) a full-fledged forward-looking analysis of the role of history and expectations in the emergence of economic clusters, and (iii) a simple analysis of the impact of urban costs on the spatial distribution of economic activities.

Suggested Citation

Ottaviano, Gianmarco I.P. and Tabuchi, Takatoshi and Thisse, Jacques-François, Agglomeration and Trade Revisited. International Economic Review, Vol. 43, pp. 409-436, 2002. Available at SSRN: https://ssrn.com/abstract=312535

Gianmarco I.P. Ottaviano (Contact Author)

Bocconi University - Department of Economics and Paolo Baffi Centre on Central Banking and Financial Regulation ( email )

Via Gobbi 5
Milan, 20136
Italy

Takatoshi Tabuchi

University of Tokyo - Faculty of Economics ( email )

7-3-1 Hongo, Bunkyo-ku
Tokyo 113-0033
Japan
+81 3 5841 5603 (Phone)
+81 3 5841 5521 (Fax)

Jacques-François Thisse

Catholic University of Louvain (UCL) ( email )

Place des Doyens 1
Louvain-la-Neuve, 1348
Belgium

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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