Does globalization increase inequality in developing countries, and if so, how? In a theoretical model of a regionally heterogeneous economy, we show how different regional rates of technical progress due to trade and FDI interact with constraints to unskilled labor mobility. As favored regions...

Many developing countries possess comparative advantage both in natural resources and in labor-intensive industries, and experience both industrial pollution and natural resource degradation. We present a model that incorporates these stylized facts together with key spatial features and...