CAVAILHÈS, Jean; GAIGNÉ, Carl; THISSE, Jacques-François - Center for Operations Research and Econometrics (CORE), … - 2004
We analyze how the interplay between urban costs, wage wedges, and trade costs may affect the interregional location of … trade by allowing large metropolitan areas to maintain their predominance. We show that, despite low commuting costs, SECs … characterize modern economies. Moreover, when trade costs fall from high levels, the economy moves gradually from dispersion to …