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Second Nature Geography and Regional Income Disparities in Colombia

  • Jesús López-Rodríguez


  • María Cecilia Acevedo

In this paper, we derive and estimate a New Economic Geography model for the Colombian departments.2 We first derive an econometric specification relating wages to a distance weighted sum of the volumes of economic activities of the surrounding locations. Them, we test our econometric specification with data for Colombian departments in the period 1975-2000. The empirical results confirm the theoretical predictions of our model, showing that second nature geography factors (access to consumer markets) are a key variable in explaining the spatial distribution of wages in Colombia.

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Paper provided by UNIVERSIDAD DE LOS ANDES-CEDE in its series DOCUMENTOS CEDE with number 004983.

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Length: 28
Date of creation: 03 Jul 2008
Date of revision:
Handle: RePEc:col:000089:004983
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  1. Head, Keith & Mayer, Thierry, 2003. "The Empirics of Agglomeration and Trade," CEPR Discussion Papers 3985, C.E.P.R. Discussion Papers.
  2. Armando Pires, 2006. "Estimating Krugman’s Economic Geography Model for the Spanish Regions," Spanish Economic Review, Springer;Spanish Economic Association, vol. 8(2), pages 83-112, June.
  3. Jaime Bonet Morón & Adolfo Meisel Roca, 1999. "La covergencia regional en Colombia: una visión de largo plazo, 1926-1995," Documentos de trabajo sobre Economía Regional 08, Banco de la Republica de Colombia.
  4. Boris Salazar Trujillo, 1994. "Fábula y Trama en el Relato de la Convergencia," DOCUMENTOS DE TRABAJO-CIDSE 004009, UNIVERSIDAD DEL VALLE - CIDSE.
  5. Gordon H. Hanson, 1998. "Market Potential, Increasing Returns, and Geographic Concentration," NBER Working Papers 6429, National Bureau of Economic Research, Inc.
  6. 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.
  7. Paul Krugman, 1990. "Increasing Returns and Economic Geography," NBER Working Papers 3275, National Bureau of Economic Research, Inc.
  8. Adolfo Meisel, 1993. "¿Polarización o convergancia? A propósito de Cárdenas, Pontón y Trujillo," COYUNTURA ECONÓMICA, FEDESARROLLO, vol. 23(2), pages 153-160, July.
  9. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 83-116.
  10. De Long, J. Bradford & Shleifer, Andrei, 1993. "Princes and Merchants: European City Growth before the Industrial Revolution," Scholarly Articles 3451302, Harvard University Department of Economics.
  11. Keith Head & Thierry Mayer, 2005. "Regional Wage and Employment Responses to Market Potential in the EU," Bruges European Economic Research Papers 3, European Economic Studies Department, College of Europe.
  12. repec:hal:journl:halshs-00179815 is not listed on IDEAS
  13. Richard Baldwin & Rikard Forslid & Philippe Martin & Gianmarco Ottaviano & Frederic Robert-Nicoud, 2005. "Economic Geography and Public Policy," Economics Books, Princeton University Press, edition 1, number 7524, 01-2013.
  14. repec:spo:wpecon:info:hdl:2441/10191 is not listed on IDEAS
  15. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output per Worker than Others?," NBER Working Papers 6564, National Bureau of Economic Research, Inc.
  16. Michael Spence, 1976. "Product Selection, Fixed Costs, and Monopolistic Competition," Review of Economic Studies, Oxford University Press, vol. 43(2), pages 217-235.
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