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Do geographical agglomeration, growth and equity conflict?

Author

Listed:
  • Dupont, Vincent

Abstract

The paper analyses the impact of economic integration on individual inequality and regional disparity in a model of endogenous growth and geography. Assuming localised learning externalities and perfect mobility of capital, trade integration of economies yields a trade-off for the policy maker because it increases growth and decreases inequality on the one hand, but geographical agglomeration strengthens on the other. However, a policy that aims to improve trade in ideas does not face this trade-off.

Suggested Citation

Handle: RePEc:eee:paresc:v:86:y:2007:i:2:p:193-213
DOI: 10.1111/j.1435-5957.2007.00118.x
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JEL classification:

  • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
  • F15 - International Economics - - Trade - - - Economic Integration
  • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
  • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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