In contrast to what several papers have argued recently, we show that firm heterogeneity fosters agglomeration of economic activity. If firms are more similar with respect to their total factor productivity, each company faces a lower propensity to export. This renders the home market more...

We extend the standard economic geography model by introducing regional differences in technology levels and by assuming that initial technological gaps may be closed only when the learning capabilities of the lagging region are sufficiently developed. Interregional knowledge spill-overs take...

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...

In this chapter, we analyze immigration and its effect on urban and regional economies focusing on productivity and labor markets. While immigration policies are typically national, the effects of international migrants are often more easily identified on local economies. The reason is that...

In contrast to what several papers have argued recently, we show that firm heterogeneity fosters agglomeration of economic activity. If firms are more similar with respect to their total factor productivity, each company faces a lower propensity to export. This renders the home market more...

We study the interplay between the spatial distribution of economic activity and technological progress in the context of general purpose technologies with emphasis on market access. A tractable spatial equilibrium model is developed, in which ex-ante identical cities sort themselves into...

This paper deploys a dynamic extension of the Melitz (2003) model to generate predictions on export market exit and firm survival in a setting where firms endogenously make exit decisions. The central driver of the model dynamics is the inclusion of exogenous economy wide technological progress....

For developing countries, a technological catch-up is sometimes a prerequisite for endorsement of trade agreements. This paper compares sequential trade liberalization through a preferential trade agreement (PTA) and one-shot multilateral trade liberalization with respect to the speed with which...

We consider an endogenous growth model with international trade in complementary capital goods. The model possesses several distinct, balanced growth solutions, which we classify using stability under adaptive learning. Some of the equilibria can involve growth rates much higher than others. We...