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Does technological progress magnify regional disparities?

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  • Tabuchi, Takatoshi
  • Thisse, Jacques François
  • Zhu, Xiwei

Abstract

We study how technological progress in manufacturing and transportation to-gether with migration costs interact to shape the space-economy. Rising labor productivity in the manufacturing sector fosters the agglomeration of activities, whereas falling transport costs associated with technological and organizational in-novations fosters their dispersion. Since these two forces have been at work for a long time, the final outcome must depend on how drops in the costs of producing and trading goods interact with the various costs borne by migrants. Finally, when labor is heterogeneous, the most efficient workers of the less productive region are the first to move to the more productive region.

Suggested Citation

  • Tabuchi, Takatoshi & Thisse, Jacques François & Zhu, Xiwei, 2016. "Does technological progress magnify regional disparities?," IDE Discussion Papers 599, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    • Handle: RePEc:jet:dpaper:dpaper599
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    2. Marta Aloi & Joanna Poyago-Theotoky & Frédéric Tournemaine, 2022. "The Geography of Knowledge and R&D-led Growth [Real effects ofacademic research: comment]," Journal of Economic Geography, Oxford University Press, vol. 22(6), pages 1149-1190.
    3. Haiwen Zhou, 2022. "The Choice of Technology and Economic Geography," International Economic Journal, Taylor & Francis Journals, vol. 36(1), pages 1-18, January.
    4. Carl Gaigné & Jacques-François Thisse, 2013. "New Economic Geography and the City," Working Papers SMART 13-02, INRAE UMR SMART.
    5. Stef Proost & Jacques-François Thisse, 2019. "What Can Be Learned from Spatial Economics?," Journal of Economic Literature, American Economic Association, vol. 57(3), pages 575-643, September.
    6. Xu Yang & Xuan Zou & Ming Li & Zeyu Wang, 2024. "The Decarbonization Effect of the Urban Polycentric Structure: Empirical Evidence from China," Land, MDPI, vol. 13(2), pages 1-17, February.
    7. Vera Ivanova, 2018. "Spatial convergence of real wages in Russian cities," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 61(1), pages 1-30, July.
    8. Tabuchi, Takatoshi & Wang, Congcong & Zhu, Xiwei, 2023. "A Model of Economic Growth in China," MPRA Paper 117634, University Library of Munich, Germany.

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    More about this item

    Keywords

    Economic geography; Labor productivity; Manufacturing industries; Transportation; New economic geography; Technological progress; Migration costs; Labor heterogeneity;
    All these keywords.

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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