The present paper studies the effect of the choice of product quality on trade and location of firms. We discuss a model where consumers have preferences for the quality of a set of differentiated varieties. Firms do not only develop and sell manufacturing varieties in a monopolistic competitive...

We investigate the impact of changes in international trade and domestic transport costs on the internal geography of a domestic economy linked to the rest of the World through a hub. We address that issue by developing two three regions model, namely a version of the Footlose Entrepreneur and a...

Governments set numerous norms to protect consumers. Two countries may achieve the same level of protection of their consumers through different specifications. The adaptation costs induced by these differences create barriers to trade. The principle of mutual recognition addresses the problem...

We propose a model where imperfect matching between firms and workers on local labor markets leads to incentives for spatial agglomeration. We show that the occurrence of spatial agglomeration depends on initial size differences in terms of both number of workers and firms. Allowing for dynamics...

We study a Ramsey problem in infinite and continuous time and space. The problem is discounted both temporally and spatially. Capital flows to locations with higher marginal return. We show that the problem amounts to optimal control of parabolic partial differential equations (PDEs). We rely on...

In this paper we build a quality-augmented version of an economic geography model where consumers have heterogenous tastes for a set of manufacturing varieties. We discuss a footloose capital model and a footloose entrepreneur model. We show that firms selling the goods with higher values select...

We investigate how international trade and trade policy possibly affect the regional distribution of economic activities within a country involved in a process of economic integration. Our analysis reveals that the impact of decreasing international trade costs on the spatial distribution of...

In modern economies, the amount of profits distributed to shareholders is far from being negligible. We show that the way they are distributed among agents matters for the space-economy. For example, the existence of mobile rentiers is sufficient to make the symmetric configuration unstable for...

We investigate the role of the transport sector in structuring the location of economic activity within two-region economic geography models of the footloose capital and core-periphery types. In our setting, competitive carriers offer transport services for shipping manufactured goods across...

We develop an economic geography model in which mobile skilled workers choose between working in the production sector or becoming part of an unproductive political elite. The elite sets tax rates on skilled and unskilled workers to maximize its own welfare by extracting rents, thereby...