We study the indeterminacy of equilibrium in the Fujita-Krugman (1995) model of city formation under monopolistic competition and increasing returns. Both the number and the locations of cities are endogenously determined. Assuming smooth transportation costs, we examine equilibria in...

The purpose of this paper is to examine the effects of a change in the minimum wage on income distribution and employment in a developing economy. The basic framework of our analysis is the original Harris- Todaro model, in which the only factor that is intersectorally mobile is labor. We...

This paper examines the relationship between spatial clustering and inequality at the county scale with overall state per capita income in the U.S. over the period 1969-2000. For each of the 48 coterminous states we examine measures of inequality and spatial clustering and explore how a state's...

From 1975 to 1999, employment in Paris metropolitan area has become more and more decentralized. This deconcentration is almost half spread and half clustered. Parallel to the sprawl of jobs, the growth of a services oriented economy has led to an increase in sectoral concentration. But there...

How should the size and number of cities evolve optimally as population grows? Stripped of the constraints of geography itself, the setup of the New Economic Geography implies that de-agglomeration (or de- urbanization) is efficient. The number of cities increases while the size of each...

A stylized pattern of interindustry trade between developing and developed regions identifies the former as specialists in light manufactures and latter in heavy manufactures. Conventional explanations for this pattern rely on the factor proportions model, which is empirically suspect. This...

WTO negotiations rely on tariff reduction formulas. It has been argued that formula approaches are of increasing importance in trade talks, because of the large number of countries involved, the wider dispersion in initial tariffs (e.g. tariff peaks) and gaps between bound and applied tariff...

In models of economic geography, plant-level scale economies and trade costs create incentives for spatial agglomeration of production into a manufacturing core and agricultural periphery, creating regional income differentials. We examine tax competition between national governments to...

We examine the consequences of increased economic integration between nations within a region. We adopt Krugman’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 paper uses a model of horizontal multinational enterprises to explore the relationship between transportation costs and trade policy cooperation. Tariffs have the effect of attracting foreign direct investment to the benefit of consumers in the host country. As transport costs fall, the...