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Regional Integration, Trade, and Migration: Are Demand Linkages Relevant in Europe?

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Author Info

  • Rodney D. Ludema

    (Georgetown University)

  • Ian Wooton

    (University of Glasgow)

Abstract

We examine the consequences of increased economic integration between nations within a region. We adopt Krugman’s economic-geography model in which demand linkages can generate agglomeration of manufacturing activity. Manufacturing labour is assumed to be imperfectly mobile between countries. This constrains the forces of agglomeration within the region and suggests that the model may be applicable to Europe. We show that trade liberalisation may lead initially to partial agglomeration, then a re-industrialisation of the periphery. This argues in favour of a sequential approach to integration, with trade barriers being eliminated prior to a reduction in impediments to factor mobility.

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Bibliographic Info

Paper provided by EconWPA in its series International Trade with number 9802001.

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Length: 25 pages
Date of creation: 02 Feb 1998
Date of revision:
Handle: RePEc:wpa:wuwpit:9802001

Note: Type of Document - MS Word; prepared on IBM PC; to print on HP; pages: 25 ; figures: included
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Web page: http://128.118.178.162

Related research

Keywords: economic integration; economic geography; factor mobility; international trade;

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References

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  1. Krugman, Paul R & Venables, Anthony J, 1995. "Globalization and the Inequality of Nations," The Quarterly Journal of Economics, MIT Press, vol. 110(4), pages 857-80, November.
  2. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
  3. Rodney D. Ludema & Ian Wooton, 1998. "Economic Geography and the Fiscal Effects of Regional Integration," Working Papers 9809, Business School - Economics, University of Glasgow.
  4. repec:fth:iniesr:430 is not listed on IDEAS
  5. Faini, Riccardo, 1996. "Increasing returns, migrations and convergence," Journal of Development Economics, Elsevier, vol. 49(1), pages 121-136, April.
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