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The Welfare Implication of an Expansion of an Industrial Zone

Author

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  • Tetsu, Kazuhiro

    () (Shizuoka University)

Abstract

The main objectives of this paper are to present a model introducing the idea of two isolated areas that have different economic features and to analyze the effects of an expansion of an industrial zone. In this model, we assume that there are two areas: one is under full employment, the other is suffering from urban unemployment. In such a two isolated area model, we show that the economic development of a rural area is attained at the cost of an urban area and that national income depends on the endowment of labor force in each area.

Suggested Citation

  • Tetsu, Kazuhiro, 2001. "The Welfare Implication of an Expansion of an Industrial Zone," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 16, pages 369-378.
  • Handle: RePEc:ris:integr:0169
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    References listed on IDEAS

    as
    1. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, pages 833-850.
    2. Panagariya, A., 1997. "Preferential trading and the myth of natural trading partners," Japan and the World Economy, Elsevier, vol. 9(4), pages 471-489, December.
    3. Martin Richardson, 1994. "Why A Free Trade Area? The Tariff Also Rises," Economics and Politics, Wiley Blackwell, vol. 6(1), pages 79-96, March.
    4. Olarreaga, Marcelo & Soloaga, Isidro, 1998. "Endogenous Tariff Formation: The Case of Mercosur," World Bank Economic Review, World Bank Group, vol. 12(2), pages 297-320, May.
    5. Schiff, Maurice, 1996. "Small is beautiful : preferential trade agreements and the impact of country size, market share, efficiency, and trade policy," Policy Research Working Paper Series 1668, The World Bank.
    6. Schiff, Maurice, 1997. "Small is Beautiful: Preferential Trade Agreements and the Impact of Country Size, Market Share, and Smuggling," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 12, pages 359-387.
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    More about this item

    Keywords

    Industral Zone; Export Processing Zone; Two-area Model;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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