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Geography of the World Economy

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  • Kiminori Matsuyama

Abstract

This paper presents a theoretical framework to study the effects of geographical factors on the distribution of industries in the world econmy, which consists of many regions. The geographical feature of each region is summarized by a proximity matrix, whose elements measure the closeness between every pair of regions, and depend on the parameters representing the transport and other costs of using a variety of trade routes. The main objective is to show how a change in these costs of trade affects the distribution of industries, by amplifying the geographical advantages and disadvantages held by different regions. The results are used not only to examine the effects of an improvement in transport infrastructure, but also to discuss some problems from economic history (mostly Japanese and European), regional economic integration, the nort-south division, and others.

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Bibliographic Info

Paper provided by Northwestern University, Center for Mathematical Studies in Economics and Management Science in its series Discussion Papers with number 1239.

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Date of creation: Jan 1999
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Handle: RePEc:nwu:cmsems:1239

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Keywords: A Multiregion Model of Trade with Increasing Returns and Transport Costs; REgional Economic Integration; Uneven Development; Geography; Locational Advantages and Disadvantages; Proximity Matrix; Trade Routes.;

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References

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  1. Kiminori Matsuyama, 1996. "Why Are There Rich and Poor Countries? Symmetry-Breaking in the World Economy," NBER Working Papers 5697, National Bureau of Economic Research, Inc.
  2. Lucas, Robert E, Jr, 1990. "Why Doesn't Capital Flow from Rich to Poor Countries?," American Economic Review, American Economic Association, vol. 80(2), pages 92-96, May.
  3. Baldwin, Richard E. & Venables, Anthony J., 1995. "Regional economic integration," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 31, pages 1597-1644 Elsevier.
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Cited by:
  1. Kiminori Matsuyama, 2002. "Explaining Diversity: Symmetry-Breaking in Complementarity Games," American Economic Review, American Economic Association, vol. 92(2), pages 241-246, May.
  2. A. Kerem Co┼čar & Pablo D. Fajgelbaum, 2013. "Internal Geography, International Trade, and Regional Specialization," NBER Working Papers 19697, National Bureau of Economic Research, Inc.
  3. Michal Fabinger, 2013. "Trade and Interdependence in a Spatially Complex World," 2013 Meeting Papers 874, Society for Economic Dynamics.

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