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Step-by-step Migrations

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  • Thomas J. Holmes

    (Univeristy of Minnesota)

Abstract

This paper considers a dynamic model of industry location in which there is a tension between two forces. First, there is the agglomerating force of preference of intermediate input variety that tends to keep an industry at its original location. Second, other factors tend to pull the industry in the direction of a new location. In the equilibrium of the model, migration always takes place in the direction of lower costs. The socially efficient migration path can be decentralized as an equilibrium. If the rate of cost reduction is small, the converse that an equilibrium is efficient is also true. (Copyright: Elsevier)

Suggested Citation

  • Thomas J. Holmes, 2004. "Step-by-step Migrations," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 7(1), pages 52-68, January.
    • Handle: RePEc:red:issued:v:7:y:2004:i:1:p:52-68
    DOI: 10.1016/S1094-2025(03)00033-4
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    References listed on IDEAS

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    12. Thomas J. Holmes, 1998. "The Effect of State Policies on the Location of Manufacturing: Evidence from State Borders," Journal of Political Economy, University of Chicago Press, vol. 106(4), pages 667-705, August.
    13. Chari, V V & Hopenhayn, Hugo, 1991. "Vintage Human Capital, Growth, and the Diffusion of New Technology," Journal of Political Economy, University of Chicago Press, vol. 99(6), pages 1142-1165, December.
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    Cited by:

    1. Desmet, Klaus & Rossi-Hansberg, Esteban, 2009. "Spatial growth and industry age," Journal of Economic Theory, Elsevier, vol. 144(6), pages 2477-2502, November.
    2. Adams, Brian, 2016. "The employment impact of motor vehicle assembly plant openings," Regional Science and Urban Economics, Elsevier, vol. 58(C), pages 57-70.
    3. Thomas Holmes, 2004. "EconomicDynamics Interviews Thomas Holmes on Dynamic Economic Geography," EconomicDynamics Newsletter, Review of Economic Dynamics, vol. 6(1), November.

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    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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