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Inter-regional and International Trade: Seventy Years After Ohlin

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Author Info
Behrens, Kristian
Gaigné, Carl
Ottaviano, Gianmarco Ireo Paolo
Thisse, Jacques-François

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Abstract

We study the impact of falling trade costs and falling national transport costs on the economic geography of countries involved in an integration process. Two regions between which labour is mobile form each country, but there is no international factor mobility. Commodities can be traded both nationally and internationally at positive but different costs. In our setting, a decrease in trade costs and/or in national transport costs has direct impact on prices and wages in both countries. This allows us to study how the variations of these parameters affect the terms of trade and the levels of welfare, as well as to account for their impact on the economic geography of each country in a way that significantly differs from what has been accomplished so far.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4065.

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Date of creation: Sep 2003
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Handle: RePEc:cpr:ceprdp:4065

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Related research
Keywords: agglomeration; economic geography; trade costs; transport costs;

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Find related papers by JEL classification:
F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
R12 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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References listed on IDEAS
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.:
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Full references

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. Ugo Fratesi, 2008. "Regional policy from a supra-regional perspective," The Annals of Regional Science, Springer, vol. 42(3), pages 681-703, September. [Downloadable!] (restricted)
    Other versions:
  2. Aroca, Patricio & Bosch, Mariano & Maloney, William F., 2005. "Spatial dimensions of trade liberalization and economic convergence : Mexico 1985-2002," Policy Research Working Paper Series 3744, The World Bank. [Downloadable!]
    Other versions:
  3. Brulhart, Marius & Crozet, Matthieu & Koenig, Pamina, 2004. "Enlargement and the EU Periphery: The Impact of Changing Market Potential," Discussion Paper Series 26330, Hamburg Institute of International Economics. [Downloadable!]
    Other versions:
  4. Hartmut Egger & Peter Egger, 2004. "Outsourcing and Trade in a Spatial World," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  5. Steven Brakman & Harry Garretsen & Marc Schramm, 2005. "Putting New Economic Geography to the Test: Free-ness of Trade and Agglomeration in the EU Regions," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  6. Souleymane COULIBALY, 2006. "Persistent Uneven Spread of Economic Activities within Developing RIAs," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 06.01, Université de Lausanne, Faculté des HEC, DEEP. [Downloadable!]
  7. Candau, Fabien, 2006. "The Spatial and Public Economics of Regions, a Theoretical and Empirical Survey," MPRA Paper 1153, University Library of Munich, Germany. [Downloadable!]
  8. Miren Lafourcade & Elisenda Paluzie Hernandez, 2005. "European Integration, FDI and the Internal Geography of Trade: Evidence from Western European Border Regions," Working Papers in Economics 145, Universitat de Barcelona. Espai de Recerca en Economia. [Downloadable!]
  9. Candau Fabien, 2005. "Lumpy World and Race to the Bottom," International Trade 0508008, EconWPA, revised 01 Feb 2006. [Downloadable!]
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