We study urbanization and rural industrialization in a setting involving one urban region (U) and one rural region (R). Farmers are heterogeneous in their attitude toward migration, while firms' efficiency is higher in U than in R because agglomeration economies have been built in U. Farmers...

Regions can benefit by offering infrastructure services that are differentiated by quality, thus segmenting the market for industrial location. Regions that compete on infrastructure quality have an incentive to increase the degree of differentiation between them. This places an upper bound on...

We develop a new model of a "featureful" city in which locations are differentiated by two attributes, that is, the distance to employment centers and the accessibility to given amenities, and we show how heterogeneous households in income are sorted out across the urban space. Under Stone-Geary...

We show that space matters in designing the optimal provision of local public goods (LPGs). Geography imposes particular institutional structure of local governments due to the overlapping of market areas associated with different LPGs. The optimum can be decentralized through local governments...

Marshallian districts are locales that accommodate a large number of small firms producing similar goods to be exported and benefit from the accumulation of know-how associated with workers residing there. We study the making of such districts by assuming that the cost function of a firm is a...

This paper investigates the impacts of progressive trade openness, technological externalities,and heterogeneity of individuals on the formation of entrepreneurship in a two-countryoccupation choice model. We show that trade opening gives rise to a non-monotonic processof international...

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

New economic geography focuses on the impact of falling transport costs on the spatial distribution of activities. However, it disregards the role of technological innovations, which are central to modern economic growth, as well as the role of migration costs, which are a strong impediment to...

We study how political boundaries and fiscal competition interact with the labor and land markets to determine the economic structure and performance of metropolitan areas. Contrary to general belief, institutional fragmentation need not be welfare-decreasing, and commuting from the suburbs to...

We analyze how the interplay between urban costs, wage wedges, and trade costs may affect the interregional location of firms as wel l 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,...