agglomeration of production into a manufacturing core and agricultural periphery, creating regional income differentials. We examine … thus higher equilibrium taxes. Moreover, economic integration must increase taxes when the forces of agglomeration are the …

’s economic-geography model in which demand linkages can generate agglomeration of manufacturing activity. Manufacturing labour is … assumed to be imperfectly mobile between countries. This constrains the forces of agglomeration within the region and suggests … that the model may be applicable to Europe. We show that trade liberalisation may lead initially to partial agglomeration …