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The Seamless World: A Spatial Model of International Specialization

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  • Krugman, Paul
  • Venables, Anthony J.

Abstract

This paper is an effort to do international trade theory without mentioning countries. Nearly all models of the international economy assume that trade takes place between nations or regions which are themselves dimensionless points. We develop a model in which economic space is instead assumed to be continuous, and in which this `seamless world' spontaneously organizes itself into industrial and agricultural zones because of the tension between forces of agglomeration and disagglomeration. One might expect such a model to be analytically intractable, but we are able to gain considerable insight through a combination of simulations and an analytical approach originally suggested in a biological context by Alan Turing.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1230.

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Date of creation: Aug 1995
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Handle: RePEc:cpr:ceprdp:1230

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Related research

Keywords: Agglomeration; Linkages; Location; Regions; Self-Organization;

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  1. Dixit, Avinash K & Stiglitz, Joseph E, 1975. "Monopolistic Competition and Optimum Product Diversity," The Warwick Economics Research Paper Series (TWERPS) 64, University of Warwick, Department of Economics.
  2. Courant, P.N. & Deardorff, A.V., 1989. "International Trade With Lumpy Countries," Working Papers 242, Research Seminar in International Economics, University of Michigan.
  3. Krugman, Paul & Venables, Anthony J., 1994. "Globalization and the Inequality of Nations," CEPR Discussion Papers 1015, C.E.P.R. Discussion Papers.
  4. Paul Krugman, 1990. "Increasing Returns and Economic Geography," NBER Working Papers 3275, National Bureau of Economic Research, Inc.
  5. repec:fth:iniesr:430 is not listed on IDEAS
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