Growing inflows of FDI and the increasing integration of domestic firms into International Production Networks (IPNs) set up by EU-15 principals have yielded a rise in trade in parts and components for Central Eastern European Countries (CEECs). As a consequence, new patterns of localisation of...

Interview with the 2008 Laureate in Economics Paul Krugman, 6 December 2008. The interviewer is Adam Smith, Editor-in-Chief of Nobelprize.org.

In this paper we discuss the foundations of two recent trade theories linked by the role that the space-dimension plays in this kind of models. The theories discussed are the Gravity Approach and the New Economic Geography. We dedicate much to the explanation of the micro-foundations of the...

Convergence in per capita income across countries turns on whether technological knowledge spillovers are global or local in a large class of models. This Paper estimates the amount of spillovers from R&D expenditures in major industrialized countries on a geographic basis. A new data set is...

This paper uses a full-scale CGE-model - calibrated on 1992 data - to investigate the effects of European integration on the location of industrial production. Our results reveal large differences among individual industries. Industries with high scale elasticities typically display a...

Convergence in per capita income turns on whether technological knowledge spillovers are global or local. Global spillovers favour convergence, while a geographically limited scope of knowledge diffusion can lead to regional clusters of countries with persistently different levels of income per...

We develop and econometrically estimate a model of the location of industries across countries. The model combines factor endowments and geographical considerations, and shows how industry and country characteristics interact to determine the location of production. We estimate the model on...

This paper presents a model in which long-run growth and industrial location are jointly endogenous. Specifically, it introduces Romer-Grossman-Helpman endogenous growth into Krugman’s core-periphery model with footloose labour. The paper focuses on stability of the symmetric equilibrium,...

Paul Krugman has at least three jobs: he is professor of economics and international affairs at Princeton University, Centenary Professor at the London School of Economics, and perhaps his best-known job an op-ed columnist for The New York Times. In recognition of his influence, The Washington...

This paper develops a general test of factor price equalization that is robust to unobserved regional productivity differences, unobserved region-industry factor quality differences and variation in production technology across industries. We test relative factor price equalization across...