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

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

    (Universitat de Barcelona)

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.

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Paper provided by Universitat de Barcelona. Espai de Recerca en Economia in its series Working Papers in Economics with number 103.

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Length: 33 pages
Date of creation: 2003
Date of revision:
Handle: RePEc:bar:bedcje:2003103
Contact details of provider: Postal: Espai de Recerca en Economia, Facultat de Ciències Econòmiques. Tinent Coronel Valenzuela, Num 1-11 08034 Barcelona. Spain.
Web page: http://www.ere.ub.es

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  1. Raul Livas Elizondo & Paul Krugman, 1992. "Trade Policy and the Third World Metropolis," NBER Working Papers 4238, National Bureau of Economic Research, Inc.
  2. Henry G. Overman & Stephen Redding & Anthony J. Venables, 2001. "The economic geography of trade, production, and income: a survey of empirics," LSE Research Online Documents on Economics 3712, London School of Economics and Political Science, LSE Library.
  3. Matthieu Crozet & Pamina Koenig-Soubeyran, 2004. "Trade liberalization and the internal geography of countries," Chapters, in: Multinational Firms’ Location and the New Economic Geography, chapter 5 Edward Elgar.
  4. Thierry Mayer & Keith Head, 2003. "The Empirics of Agglomeration and Trade," Working Papers 2003-15, CEPII research center.
  5. Hanson, Gordon H., 1998. "Regional adjustment to trade liberalization," Regional Science and Urban Economics, Elsevier, vol. 28(4), pages 419-444, July.
  6. Combes, Pierre-Philippe & Overman, Henry G, 2003. "The Spatial Distribution of Economic Activities in the EU," CEPR Discussion Papers 3999, C.E.P.R. Discussion Papers.
  7. Gianmarco Ottaviano & Takatoshi Tabuchi & Jacques-Francois Tissse, 1999. "Agglomeration and Trade Revisited," CIRJE F-Series CIRJE-F-65, CIRJE, Faculty of Economics, University of Tokyo.
  8. Puga, Diego, 1999. "The rise and fall of regional inequalities," European Economic Review, Elsevier, vol. 43(2), pages 303-334, February.
  9. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, June.
  10. Paluzie i Hernandez, Elisenda, 1999. "Trade policy and regional inequalities," ERSA conference papers ersa99pa231, European Regional Science Association.
  11. Gordon H. Hanson, 1994. "Localization Economies, Vertical Organization and Trade," NBER Working Papers 4744, National Bureau of Economic Research, Inc.
  12. Kevin H. O'Rourke & Jeffrey G. Williamson, 2001. "Globalization and History: The Evolution of a Nineteenth-Century Atlantic Economy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650592, June.
  13. Pérez, Concha Betrán, 1999. "Difusión y localización industrial en España durante el primer tercio del siglo XX," Revista de Historia Económica, Cambridge University Press, vol. 17(03), pages 663-696, December.
  14. J. Peter Neary, 2000. "Of Hype and Hyperbolas - Introducing the new Economic Geography," Working Papers 200019, School Of Economics, University College Dublin.
  15. Paul Krugman, 1990. "Increasing Returns and Economic Geography," NBER Working Papers 3275, National Bureau of Economic Research, Inc.
  16. Davis, Donald R. & Weinstein, David E., 1999. "Economic geography and regional production structure: An empirical investigation," European Economic Review, Elsevier, vol. 43(2), pages 379-407, February.
  17. Hanson, Gordon H, 1997. "Increasing Returns, Trade and the Regional Structure of Wages," Economic Journal, Royal Economic Society, vol. 107(440), pages 113-33, January.
  18. Joan R. Rosés & Blanca Sánchez-Alonso, 2002. "Regional Wage Convergence In Spain 1850-1930," Working Papers in Economic History wh025301, Universidad Carlos III, Instituto Figuerola de Historia y Ciencias Sociales.
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