This paper shows that subsidy competition may be efficiency enhancing. We model a subsidy game among two asymmetric regions in a new trade model, where capital can freely move among regions, but capital rewards are repatriated. We study subsidy competition, starting from an equilibrium where the...

We study environmental pollution in an economic geography framework with two cities, where pollution arises from commuting within cities, goods transport between cities, production of manufacturing and agricultural goods, and residential energy use. We find that city size has an ambiguous effect...

This paper aims to study the effect of a major historical event on the Spanish city size distribution, the Spanish Reconquista. This was a long military campaign that aimed to expel Muslims from the Iberian Peninsula. The process started in the early 1300s and ended around 1500, when the entire...