Integration, Agglomeration and the Political Economics of Factor Mobility

This paper tackles the issue of the optimality of agglomeration in a two-region economy with skilled/mobile and unskilled/immobile workers. The market leads to the optimal outcome when transport costs are high or low. However, for intermediate values, it yields agglomeration whereas dispersion is socially desirable. We show that competitive lobbying on factor mobility by the two groups of workers sustains the second best optimum.

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Year of publication:	1999-07
Authors:	Ottaviano, Gianmarco ; Thisse, Jacques-François
Institutions:	C.E.P.R. Discussion Papers
Subject:	Agglomeration \| Integration \| Mobility \| Political Economy

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Extent:	application/pdf
Series:	CEPR Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	Number 2185
Classification:	F12 - Models of Trade with Imperfect Competition and Scale Economies ; F22 - International Migration ; R13 - General Equilibrium and Welfare Economic Analysis of Regional Economics ; R38 - Government Policy
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005504229