This paper estimates a structural model of economic geography using cross-country data on per capita income, bilateral trade, and the relative price of manufacturing goods. More than 70% of the variation in per capita income can be explained by the geography of access to markets and to sources...

Rapid urbanisation is a major feature of developing countries. Some 2 billion more people are likely to become city residents in the next 30 years, yet urbanisation has received little attention in the modern development economics literature. This paper reviews theoretical and empirical work on...

Some writers have predicted that new technologies mean the 'death of distance', allowing suitably skilled economies to converge with high income countries. This paper evaluates this claim. It argues that geography matters for international income inequalities, and that new technologies will...

The paper considers the equilibrium location of two industries in two countries. Both industries are imperfectly competitive and produce goods which are used in final consumption and as intermediates by firms in the same industry. Intermediate useage creates cost and demand linkages between...

This paper analyses a model of economic development in which international inequalities in the location of industry and income are supported by the agglomeration of industry in a subset of countries. Economic development may not be a gradual process of convergence by all countries, but instead...

Much of the excitement around the North American Free Trade Agreement (NAFTA) has been generated by anticipations of a strongly foreign investment response. Nevertheless, the plethora of applied papers about the NAFTA have all either ignored DFI or kept it exogenous. In this paper we provide...

We develop a diagrammatic framework that can be used to study the economic linkages between regions or cities. Hitherto, such linkages have not been the primary focus of either the theoretical or empirical literatures. We show that our general framework can be used to interpret both the New...

This paper analyses the ways in which liberalisation of goods trade may change factor prices and the incentives for factor mobility. While trade liberalisation reduces the incentives for factor mobility in a Heckscher-Ohlin model, it may increase it in a specific factors model (in which there is...

This paper considers the location effects of geographically discriminatory trade policy. A preferential move towards a customs union pulls industry into the integrating countries. When internal barriers fall below some critical level, input-output links between imperfectly competitive firms lead...

This paper outlines a new approach for analysing the role of trade in promoting industrial development. It offers an explanation as to why firms are reluctant to move to economics with lower labour costs, and shows how trade liberalisation can change the incentives for firms to locate in...