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Economic Geography and International Inequality

  • Stephen Redding
  • Anthony J. Venables

This paper estimates a structural model of economic geography using cross-country data on per capita income, bilateral trade, and the relative price of manufacturing goods. More than 70% of the variation in per capita income can be explained by the geography of access to markets and to sources of supply of intermediate inputs. These results are robust to the inclusion of other geographical, social, and institutional characteristics. The estimated coefficients are consistent with plausible values for the structural parameters of the model. We find quantitatively important effects of distance, access to the coast, and openness on levels of per capita income.

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File URL: http://cep.lse.ac.uk/pubs/download/DP0495.pdf
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Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0495.

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Date of creation: May 2001
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Handle: RePEc:cep:cepdps:dp0495
Contact details of provider: Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

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  19. 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.
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