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Inter-regional and International Trade: Seventy Years After Ohlin

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

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

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Citations

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Cited by:
  1. Ugo Fratesi, 2008. "Regional policy from a supra-regional perspective," The Annals of Regional Science, Springer, vol. 42(3), pages 681-703, September.
  2. Hartmut Egger & Peter Egger, 2004. "Outsourcing and Trade in a Spatial World," CESifo Working Paper Series 1349, CESifo Group Munich.
  3. Brakman, Steven & Garretsen, Harry & Schramm, Marc, 2006. "Putting new economic geography to the test: Free-ness of trade and agglomeration in the EU regions," Regional Science and Urban Economics, Elsevier, vol. 36(5), pages 613-635, September.
  4. Marius BRÜLHART & Matthieu CROZET & Pamina KOENIG, 2004. "Enlargement and the EU Periphery: The Impact of Changing Market Potential," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 04.02, Université de Lausanne, Faculté des HEC, DEEP.
  5. 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.
  6. Ulltveit-Moe, Karen Helene, 2007. "Regional policy design: An analysis of relocation, efficiency and equity," European Economic Review, Elsevier, vol. 51(6), pages 1443-1467, August.
  7. Beltramo, Theresa, 2010. "Changes in Bilateral Trade Costs between European Union Member States & Major Trading Partners: An Empirical Analysis from 1989 - 2006," MPRA Paper 24259, University Library of Munich, Germany.
  8. 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.
  9. Candau Fabien, 2005. "Lumpy World and Race to the Bottom," International Trade 0508008, EconWPA, revised 01 Feb 2006.
  10. Gáname, María Cecilia, 2005. "The Effects of Endogenous Protection on the Economic Landscape," IOB Working Papers 2005.01, Universiteit Antwerpen, Institute of Development Policy and Management (IOB).
  11. Candau, Fabien, 2006. "The Spatial and Public Economics of Regions, a Theoretical and Empirical Survey," MPRA Paper 1153, University Library of Munich, Germany.
  12. Sanguinetti, Pablo & Volpe Martincus, Christian, 2009. "Tariffs and manufacturing location in Argentina," Regional Science and Urban Economics, Elsevier, vol. 39(2), pages 155-167, March.
  13. 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.

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