Evolution of Locations, Specialisation and Factor Returns with Two Distinct Waves of Globalisation

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Evolution of Locations, Specialisation and Factor Returns with Two Distinct Waves of Globalisation

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Jang Ping Thia

Abstract

This paper presents an economic geography model with two differentiated sectors that exhibitweaker inter and stronger intra-industry input-output linkages. Labour is also differentiatedaccording to skills in a hierarchy of tasks they can perform. Globalisation occurs in twodistinct phases, leading to the agglomeration of an industry (manufacturing) in the first wave,which is subsequently displaced by the other industry (services) when the second wave ofglobalisation takes place. Because of agglomeration effects, the increase in relativeendowment of a factor may increase its relative wages, leading to more inequality. Withinand between nations inequality can result.

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Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0875.

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Date of creation: Jun 2008
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Handle: RePEc:cep:cepdps:dp0875

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Find related papers by JEL classification:
F02 - International Economics - - General - - - International Economic Order; Noneconomic International Organizations;; Economic Integration and Globalization: General
F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

This paper has been announced in the following NEP Reports:

NEP-ALL-2008-08-31 (All new papers)
NEP-GEO-2008-08-31 (Economic Geography)
NEP-URE-2008-08-31 (Urban & Real Estate Economics)

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Other versions:
- Stephen Redding & Anthony J. Venables, 2001. "Economic Geography and International Inequality," CEP Discussion Papers dp0495, Centre for Economic Performance, LSE. [Downloadable!]
- Redding, Stephen J & Venables, Anthony J., 2000. "Economic Geography and International Inequality," CEPR Discussion Papers 2568, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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