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The Seamless World: A Spatial Model of International Specialization

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Author Info
Krugman, Paul
Venables, Anthony J.

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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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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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Find related papers by JEL classification:
F1 - International Economics - - Trade
F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
F15 - International Economics - - Trade - - - Economic Integration
R3 - Urban, Rural, and Regional Economics - - Production Analysis and Firm Location

References listed on IDEAS
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  1. Courant, Paul N & Deardorff, Alan V, 1992. "International Trade with Lumpy Countries," Journal of Political Economy, University of Chicago Press, vol. 100(1), pages 198-210, February. [Downloadable!] (restricted)
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  2. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June. [Downloadable!] (restricted)
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  3. Krugman, P. & Venables, A.J., 1995. "Globalization and the Inequality of Nations," Research Institute of Industrial Economics Working Papers 430, Research Institute of Industrial Economics (IFN).
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  4. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Thomas J. Holmes, 1996. "Step-by-step migration to efficient agglomerations," Staff Report 221, Federal Reserve Bank of Minneapolis. [Downloadable!]
  2. Danny Quah, 2002. "Spatial Agglomeration Dynamics," American Economic Review, American Economic Association, vol. 92(2), pages 247-252, May. [Downloadable!]
    Other versions:
  3. Frans Bal & Peter Nijkamp, 1997. "Exogenous and Endogenous Spatial Growth Models," Tinbergen Institute Discussion Papers 97-022/3, Tinbergen Institute. [Downloadable!]
  4. Francesca Medda & Peter Nijkamp & Piet Rietveld, 1998. "Urban industrial relocation: The theory of edge cities," ERSA conference papers ersa98p326, European Regional Science Association. [Downloadable!]
    Other versions:
  5. Braunerhjelm, Pontus & Thulin, Per, 2005. "The trade-off between agglomeration forces and relative costs: EU versus the “world” Evidence from firm-level location data 1974-1998," Working Paper Series in Economics and Institutions of Innovation 30, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies. [Downloadable!]
  6. Donald R. Davis & David E. Weinstein, 1998. "Market Access, Economic Geography, and Comparative Advantage: An Empirical Assessment," NBER Working Papers 6787, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  7. Esteban Rossi-Hansberg, 2005. "A Spatial Theory of Trade," American Economic Review, American Economic Association, vol. 95(5), pages 1464-1491, December. [Downloadable!]
  8. BOURDEAU-LEPAGE, Lise, 2001. "Marchés du travail et disparités régionales en Pologne," LATEC - Document de travail - Economie (1991-2003) 2001-08, LATEC, Laboratoire d'Analyse et des Techniques EConomiques, CNRS UMR 5118, Université de Bourgogne. [Downloadable!]
  9. Orlando Gomes, 2004. "Location Dynamics and Knowledge Agglomeration," Urban/Regional 0409012, EconWPA. [Downloadable!]
  10. Pascal Mossay, 2003. "Increasing Returns And Heterogeneity In A Spatial Economy," Working Papers. Serie AD 2003-04, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
  11. Pontus Braunerhjelm & Per Thulin, 2009. "Agglomeration, Relative Wage Costs and Foreign Direct Investment—Evidence from Swedish MNCs 1974–1998," Journal of Industry, Competition and Trade, Springer, vol. 9(3), pages 197-217, September. [Downloadable!] (restricted)
  12. Krugman, Paul, 1998. "Space: The Final Frontier," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 161-74, Spring. [Downloadable!] (restricted)
  13. Giulio Bottazzi & Giovanni Dosi & Giorgio Fagiolo, 2001. "On the Ubiquitous Nature of the Agglomeration Economies and their Diverse Determinants: Some Notes," LEM Papers Series 2001/10, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy. [Downloadable!]
  14. Tiina Heikkinen, 2003. "A Random Utility Model of Demand for Variety under Spatial Differentiation," ERSA conference papers ersa03p294, European Regional Science Association. [Downloadable!]
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