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The Geography of Development

Author

Listed:
  • Klaus Desmet
  • Dávid Krisztián Nagy
  • Esteban Rossi-Hansberg

Abstract

We develop a dynamic spatial growth theory with realistic geography. We characterize the model and its balanced-growth path and propose a methodology to analyze equilibria with different levels of migration frictions. Different migration scenarios change local market size, innovation incentives, and the evolution of technology. We bring the model to the data for the whole world economy at a 1° × 1° geographic resolution. We then use the model to quantify the gains from relaxing migration restrictions. Our results indicate that fully liberalizing migration would increase welfare about threefold and would significantly affect the evolution of particular regions of the world.

Suggested Citation

  • Klaus Desmet & Dávid Krisztián Nagy & Esteban Rossi-Hansberg, 2018. "The Geography of Development," Journal of Political Economy, University of Chicago Press, vol. 126(3), pages 903-983.
    • Handle: RePEc:ucp:jpolec:doi:10.1086/697084
    DOI: 10.1086/697084
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    More about this item

    JEL classification:

    • F1 - International Economics - - Trade
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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