This paper posits a new approach to the 'wage equation' of the New Economic Geography (NEG). On one side, it is shown that the NEG provides a spatial explanation of marginal costs, instead of wages. On the other side, and focusing on the statistical properties of the data, it is explained why...

The present paper studies how European integration might affect the migration of workers in the enlarged EU. Unlike the reduced-form migration models, we base our empirical analysis on the theory of economic geography à la Krugman (1991), which provides an alternative modelling of migration...

Globalization and European integration are substantially changing the interregional division of labor in Europe and the industrial specialization of European regions, thereby potentially affecting the extent of disparities between countries and regions. This paper reviews several theoretical...

For reasons of analytical tractability, new economic geography (NEG) models treat geography in a very simple way: attention is either confined to a simple 2-region or to an equidistant multi-region world. As a result, the main predictions regarding the impact of e.g. diminishing trade costs are...

Based on a new economic geography (NEG) model by Puga (1999), we use the equilibrium wage equation to estimate two key structural model parameters for the NUTS II EU regions. These estimations enable us to come up with an empirically grounded free-ness of trade parameter. In line with NEG...

The present paper studies labour migration in the enlarged EU. Adopting the Krugman’s framework of the New Economic Geography, we are able to study both the determinants of labour migration, such as market potential, wages, cost of living on one hand, and labour migration on the other hand...

We study the impact of changing relative market access in an enlarged EU on the economies of incumbent Objective 1 regions. First, we track the impact of external opening on internal spatial configurations in a three-region economic geography model. External opening gives rise to potentially...

New Economic Geography (NEG) has reached a theoretical consolidation while related empirical tests are still scarce. The present paper aims at providing some evidence on the validity of forces emphasised by NEG. The analysis starts from the nominal wage equation derived from the Krugman...

Implementation of the European internal market and East-West integration has been accompanied by a dramatic change in the spatial distribution of economic activity, with higher growth west and east of a longitude degree through Germany and Italy. In the east, income growth has been accompanied...

We study the effect of international trade and freeness of trade (openness) on interregional inequality within countries. We estimate a model derived from a structural economic-geography approach in which interregional inequality depends on weighted trade shares and trade costs. In addition to...