This paper analyzes the impact of skill heterogeneity on regional patterns of production and housing in the presence of pecuniary externalities within a general equilibrium framework assuming monopolistic competition at intermediate good markets. It shows that the interplay of heterogenous...

We argue that the interaction between mobility and wealth provides a view that rationalizes low geographic migration rates, despite migration costs being lower than currently thought. We reach this conclusion by developing and solving a quantitative dynamic spatial equilibrium model with...

Second nature geography variables are very relevant in the explanation of income disparities across regions within countries and across countries. This paper uses the framework of the New Economic Geography to derive the structural equation which relates nominal wages with a distance weighted...

Although the Computable General Equilibrium (CGE) model is not a new tool for analysing policy impacts, it has not gained a wide popularity in regional applications such as rural economies yet. This study demonstrates how a regional CGE model can be applied for analysing regional impacts of...

The purpose of this paper is to examine whether the strategic motive for protection present in trade and agglomeration models, in the so-called new economic geography framework, is sensitive to the standard assumption that there is a sole agglomeration industry. We first investigate unilateral...

How does intranational factor mobility shape the welfare effects of a trade shock? I provide evidence that during WWI, a demand shock emanated from belligerent countries and affected neutral Spain. Within Spain, labor predominantly reallocated locally, while the most affected provinces...

The last century has witnessed dramatic changes in the world economy. The service (tertiary) sector, which at the beginning of the 20th century was of little importance relative to agriculture and manufacturing, has become the dominant sector today, accounting for 80% and more of value added in...

This paper analyzes a closed linear polycentric city with homogenous households who probabilistically select their workplace and residence locations. The study utilizes a continuous logit model to describe household location choices. In contrast to the classic urban model with deterministic...

This paper describes a methodology to develop a Computable General Equilibrium model with a sub-national detail starting from a global database and model presenting the country-level as the highest resolution. This procedure is demonstratively applied to Italy, but can be transferred to any...

We analyze the role of optimal income taxation across different local labor markets. Should labor in large cities be taxed differently than in small cities? We find that a planner who needs to raise revenue and is constrained by free mobility of labor across cities does not choose equal taxes...