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Industrial agglomerations and wage gradients: the Spanish economy in the interwar period

Author

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  • Daniel Aurelio Tirado Fabregat
  • Jordi Pons Novell
  • Elisenda Paluzie Hernandez

    (Universitat de Barcelona)

Abstract

This paper gives new evidence on the relationship between integration and industrial agglomeration in the presence of scale economies, by testing directly one of the predictions that can be derived from Krugman (1991), that is, the existence of regional nominal wage gradients and its transformation following changes in trade regimes. Our case study analyzes the effects of the substitution of an open economy by a closed economy regime, exactly the opposite process studied by Hanson (1996, 1997). In Spain, during the interwar period, protectionist policies would have favored the loss of centrality of the coastal location (Barcelona) and the relative rise of central locations (such as Madrid). Our results indicate the existence of a wage gradient centered in Barcelona during the interwar period (1914-1930) and its weakening after 1925.

Suggested Citation

  • Daniel Aurelio Tirado Fabregat & Jordi Pons Novell & Elisenda Paluzie Hernandez, 2003. "Industrial agglomerations and wage gradients: the Spanish economy in the interwar period," Working Papers in Economics 103, Universitat de Barcelona. Espai de Recerca en Economia.
  • Handle: RePEc:bar:bedcje:2003103
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    References listed on IDEAS

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    2. J.Peter Neary, 2001. "Of Hype and Hyperbolas: Introducing the New Economic Geography," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 536-561, June.
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    Citations

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    Cited by:

    1. Maria Florencia Granato, 2011. "REGIONAL NEW ECONOMIC GEOGRAPHY (refereed paper)," ERSA conference papers ersa10p747, European Regional Science Association.
    2. Rosa Sanchis-Guarner & Enrique Lopez-Bazo, 2006. "Are Skilled Workers More Attracted to Economic Agglomerations?," ERSA conference papers ersa06p120, European Regional Science Association.
    3. Brian A'Hearn & Anthony J. Venables, 2011. "Internal Geography and External Trade: regional disparities in Italy, 1861-2011," Quaderni di storia economica (Economic History Working Papers) 12, Bank of Italy, Economic Research and International Relations Area.
    4. Jesús López-rodríguez & J.Andres Faina Medin, "undated". "Regional Income Disparities in Europe: What Role for Location?," EcoMod2006 272100054, EcoMod.
    5. Elisenda Paluzie & Jordi Pons & Javier Silvestre & Daniel Tirado, 2009. "Migrants and market potential in Spain over the twentieth century: a test of the new economic geography," Spanish Economic Review, Springer;Spanish Economic Association, vol. 11(4), pages 243-265, December.

    More about this item

    JEL classification:

    • N63 - Economic History - - Manufacturing and Construction - - - Europe: Pre-1913
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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