Trade Liberalization and the Spatial Distribution of Economic Activity within a Country

U of Nottingham Research Paper No. 2007/23

25 Pages Posted: 25 Jun 2007

See all articles by Pedro E. Moncarz

Pedro E. Moncarz

National University of Cordoba; CONICET

Michael Bleaney

University of Nottingham - School of Economics

Date Written: June 2007

Abstract

The effects of the liberalization of international trade are analyzed in a New Economic Geography model of a country with an asymmetric distribution of housing between regions. Labour is mobile between regions but not between countries. Trade liberalization tends to reduce inequalities in the distribution of population between the two regions, although population is always more unequally distributed than housing. Results are similar when there is a bias in preferences towards home-produced varieties of manufactures. If consumers care relatively little about housing and transport costs are high enough, an agglomerated equilibrium becomes stable.

Keywords: International trade, agglomeration, economic geography, housing costs

JEL Classification: F12, R12

Suggested Citation

Moncarz, Pedro Esteban and Bleaney, Michael, Trade Liberalization and the Spatial Distribution of Economic Activity within a Country (June 2007). U of Nottingham Research Paper No. 2007/23, Available at SSRN: https://ssrn.com/abstract=995418 or http://dx.doi.org/10.2139/ssrn.995418

Pedro Esteban Moncarz

National University of Cordoba ( email )

Av. Haya de la Tore s/n
Pabellon Argentina
Cordoba, Córdoba 5000
Argentina

CONICET ( email )

Avda. Rivadavia 1917
Buenos Aires, Federal Capital C1033AAJ
Argentina

Michael Bleaney (Contact Author)

University of Nottingham - School of Economics ( email )

University Park
Nottingham, NG7 2RD
United Kingdom
+44 0 115 951 5265 (Phone)
+44 0 115 951 5141 (Fax)

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