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Integration, geography and the burden of history

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  • Ottaviano, Gianmarco I. P.

Abstract

This paper develops a simple two-region two-sector general equilibrium model of trade and migration where one monopolistically competitive sector generates local pecuniary externalities. The aim is to gain insight on the question whether economic integration can be expected to increase the differences in industrial structure between more and less developed regions. It is shown that a reduction in trade and/or migration costs weakens the lock-in effect of historical events while strengthening the role of expectations.
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  • Ottaviano, Gianmarco I. P., 1999. "Integration, geography and the burden of history," Regional Science and Urban Economics, Elsevier, vol. 29(2), pages 245-256, March.
  • Handle: RePEc:eee:regeco:v:29:y:1999:i:2:p:245-256
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    1. Kyoji Fukao & Roland Benabou, 1993. "History Versus Expectations: A Comment," The Quarterly Journal of Economics, Oxford University Press, vol. 108(2), pages 535-542.
    2. Mussa, Michael, 1978. "Dynamic Adjustment in the Heckscher-Ohlin-Samuelson Model," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 775-791, October.
    3. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    4. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, pages 297-308.
    5. Paul Krugman, 1991. "History versus Expectations," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 651-667.
    6. Paul Krugman, 1992. "A Dynamic Spatial Model," NBER Working Papers 4219, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Barrios, Salvador & Bertinelli, Luisito & Strobl, E. & Teixeira, Antonio-Carlos, 2005. "The dynamics of agglomeration: evidence from Ireland and Portugal," Journal of Urban Economics, Elsevier, vol. 57(1), pages 170-188, January.
    2. Ottaviano, Gianmarco & Thisse, Jacques-Francois, 2004. "Agglomeration and economic geography," Handbook of Regional and Urban Economics,in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 58, pages 2563-2608 Elsevier.
    3. Stefania Vitali & Mauro Napoletano & Giorgio Fagiolo, 2013. "Spatial Localization in Manufacturing: A Cross-Country Analysis," Regional Studies, Taylor & Francis Journals, pages 1534-1554.
    4. Ottaviano, Gianmarco I. P. & Thisse, Jacques-Francois, 2002. "Integration, agglomeration and the political economics of factor mobility," Journal of Public Economics, Elsevier, vol. 83(3), pages 429-456, March.
    5. Martijn Brons & Henri L.F.M. de Groot & Peter Nijkamp, 1999. "Growth Effects of Fiscal Policies - A Comparative Analysis in a Multi-Country Context," Tinbergen Institute Discussion Papers 99-042/3, Tinbergen Institute.
    6. Takatoshi Tabuchi & Jacques-François Thisse & Xiwei Zhu, 2014. "Technological Progress and Economic Geography," CIRJE F-Series CIRJE-F-915, CIRJE, Faculty of Economics, University of Tokyo.
    7. Henri Busson, 2013. "Spatial Inequalities and Expectations: The Role of Heterogeneity in Krugman's Model," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201317, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
    8. Peri, Giovanni, 2002. "Globalization, rigidities and national specialization: a dynamic analysis," Structural Change and Economic Dynamics, Elsevier, vol. 13(2), pages 151-177, June.
    9. Ottaviano, Gianmarco I. P., 2001. "Monopolistic competition, trade, and endogenous spatial fluctuations," Regional Science and Urban Economics, Elsevier, vol. 31(1), pages 51-77, February.
    10. Brulhart, Marius & Trionfetti, Federico, 2004. "Public expenditure, international specialisation and agglomeration," European Economic Review, Elsevier, vol. 48(4), pages 851-881, August.
    11. Alho, Kari E.O. & Kaitila, Ville & Widgrén, Mika, 2008. "Offshoring, Relocation and the Speed of Convergence in the Enlarged European Union," Discussion Papers 1156, The Research Institute of the Finnish Economy.
    12. Ottaviano, Gianmarco I. P. & Puga, Diego, 1997. "Agglomeration in a global economy: a survey," LSE Research Online Documents on Economics 20324, London School of Economics and Political Science, LSE Library.
    13. Jeffrey S. Zax & Yin He, 2016. "The Law Of One Price In Chinese Factor Markets," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 61(04), pages 1-31, September.
    14. Marius BRÜLHART & Federico TRIONFETTI, 2000. "Public Expenditure and International Specialisation," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 00.23, Université de Lausanne, Faculté des HEC, DEEP.
    15. Barrios, Salvador & Bertinelli, Luisito & Eric, Strobl & Antonio Carlos, Teixeira, 2003. "Agglomeration Economies and the Location of Industries: A comparison of Three small European Countries," MPRA Paper 5704, University Library of Munich, Germany.
    16. Yamada, Masao, 2004. "Industrialization and substitutability: a note," Journal of Economic Dynamics and Control, Elsevier, vol. 28(8), pages 1625-1634, June.
    17. Mossay, Pascal, 2006. "Stability of spatial adjustments across local exchange economies," Regional Science and Urban Economics, Elsevier, vol. 36(4), pages 431-449, July.
    18. Maurice CATIN & Stéphane GHIO, 2004. "Stages Of Regional Development And Spatial Concentration," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 19, pages 185-221.

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