Market size and transport costs are important ingredients of international trade. We propose to look at these issues from a different perspective. Using a Hotelling duopoly model with quadratic transport costs, we analyze the welfare effects of international trade between two countries which...

We investigate how differences in set-up costs of various types affect the trade-off between global effciency and spatial equity and show that the standard assumption of symmetry in fixed costs masks the existence of an interesting effect: the range of available varieties varies depends on the...

We consider an economic geography model of a new genre: all firms and workers are mobile and their agglomeration within a city generates rising urban costs through competition on a land market. When commuting costs are low (high), the industry tends to be agglomerated (dispersed). With two...

The purpose of this paper 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...

We study the effects of a decrease in trade costs on the spatial distribution of industry in a multi-regional economy, when a rise in the regional population of workers generates higher urban costs. We show that high and low trade costs imply that all regions involve a positive share of the...

There is a wide consensus among international institutions and national governments in favor of compact (i.e. densely populated) cities as a way to improve the ecological performance of the transport system. Indeed, when both the intercity and intra-urban distributions of activities are given, a...

We analyze how the interplay between urban costs, wage wedges, and trade costs may affect the interregional location of firms as well as the intraurban location, within the central business district or in a secondary employment center (SEC) of the selected region. In this way, we investigate, on...

We develop a model of commodity tax competition with monopolistically competitive internationally mobile firms, transport costs, and asymmetric country sizes. We investigate the impacts of non-cooperative tax setting, as well as of tax harmonization and changes in the tax principle, in both the...

This paper explores the interplay between commodities’ transportation costs and workers’ commuting costs within a general equilibrium framework `a la Dixit-Stiglitz. Workers are mobile and choose a region where to work as well as an intraurban location where to live. We show that a more...