Regional Integration, Trade, and Migration: Are Demand Linkages Relevant in Europe?
We examine the consequences of increased economic integration between nations within a region. We adopt Krugman’s economic-geography model in which demand linkages can generate agglomeration of manufacturing activity. Manufacturing labour is assumed to be imperfectly mobile between countries. This constrains the forces of agglomeration within the region and suggests that the model may be applicable to Europe. We show that trade liberalisation may lead initially to partial agglomeration, then a re-industrialisation of the periphery. This argues in favour of a sequential approach to integration, with trade barriers being eliminated prior to a reduction in impediments to factor mobility.
(This abstract was borrowed from another version of this item.)
|Date of creation:||Jan 1997|
|Date of revision:||Jul 1997|
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- Krugman, Paul, 1991.
"Increasing Returns and Economic Geography,"
Journal of Political Economy,
University of Chicago Press, vol. 99(3), pages 483-499, June.
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- Rodney D. Ludema & Ian Wooton, 1998. "Economic Geography and the Fiscal Effects of Regional Integration," Working Papers 9809, Business School - Economics, University of Glasgow.
- Ludema, Rodney D & Wooton, Ian, 1998. "Economic Geography and the Fiscal Effects of Regional Integration," CEPR Discussion Papers 1822, C.E.P.R. Discussion Papers.
- repec:hhs:iuiwop:430 is not listed on IDEAS
- Faini, Riccardo, 1996. "Increasing returns, migrations and convergence," Journal of Development Economics, Elsevier, vol. 49(1), pages 121-136, April. Full references (including those not matched with items on IDEAS)
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