IDEAS home Printed from https://ideas.repec.org/p/hal/wpaper/halshs-00586878.html
   My bibliography  Save this paper

New economic geography: A guide to transport analysis

Author

Listed:
  • Miren Lafourcade

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, UVHC - Université de Valenciennes et du Hainaut-Cambrésis, PJSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

  • Jacques-François Thisse

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, CORE - Center of Operation Research and Econometrics [Louvain] - UCL - Université Catholique de Louvain = Catholic University of Louvain)

Abstract

The paper surveys the main contributions of new economic geography from the point of view of transport analysis. It shows that decreasing transport costs is likely to exacerbate regional disparities. However, very low transport costs should foster a more balanced distribution for economic activities across space. Thus, the spatial curve of development, which relates the degree of spatial concentration to the level of transport costs, would be bell-shaped. The paper also provides a detailed discussion of the main determinants of transport costs, which remain fairly large in most countries. It concludes with a discussion of some policy implications.

Suggested Citation

  • Miren Lafourcade & Jacques-François Thisse, 2008. "New economic geography: A guide to transport analysis," Working Papers halshs-00586878, HAL.
    • Handle: RePEc:hal:wpaper:halshs-00586878
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00586878
    as

    Download full text from publisher

    File URL: https://shs.hal.science/halshs-00586878/document
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Robert-Nicoud, Frédéric, 2006. "Off-shoring of business services and de-industrialization: threat or opportunity - and for whom?," LSE Research Online Documents on Economics 19847, London School of Economics and Political Science, LSE Library.
    2. Kristian Behrens & Carl Gaigné & Gianmarco I.P. Ottaviano & Jacques-François Thisse, 2006. "Is remoteness a locational disadvantage?," Journal of Economic Geography, Oxford University Press, vol. 6(3), pages 347-368, June.
    3. Maarten Bosker & Steven Brakman & Harry Garretsen & Marc Schramm, 2007. "Adding Geography to the New Economic Geography," CESifo Working Paper Series 2038, CESifo.
    4. Alex Anas & Richard Arnott & Kenneth A. Small, 1998. "Urban Spatial Structure," Journal of Economic Literature, American Economic Association, vol. 36(3), pages 1426-1464, September.
    5. Paul Krugman & Anthony J. Venables, 1995. "Globalization and the Inequality of Nations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(4), pages 857-880.
    6. Robert C. Feenstra, 1998. "Integration of Trade and Disintegration of Production in the Global Economy," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 31-50, Fall.
    7. Head, Keith & Mayer, Thierry, 2004. "The empirics of agglomeration and trade," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 59, pages 2609-2669, Elsevier.
    8. Papageorgiou, Yorgo Y & Smith, Terrence R, 1983. "Agglomeration as Local Instability of Spatially Uniform Steady-States," Econometrica, Econometric Society, vol. 51(4), pages 1109-1119, July.
    9. Edward Glaeser & Janet Kohlhase, 2003. "Cities, regions and the decline of transport costs," Economics of Governance, Springer, vol. 83(1), pages 197-228, October.
    10. Fujita,Masahisa, 1991. "Urban Economic Theory," Cambridge Books, Cambridge University Press, number 9780521396455, January.
    11. Ottaviano, Gianmarco I.P. & van Ypersele, Tanguy, 2005. "Market size and tax competition," Journal of International Economics, Elsevier, vol. 67(1), pages 25-46, September.
    12. Henderson, Vernon, 1997. "Medium size cities," Regional Science and Urban Economics, Elsevier, vol. 27(6), pages 583-612, November.
    13. Spulber,Daniel F., 2011. "Global Competitive Strategy," Cambridge Books, Cambridge University Press, number 9780521367981.
    14. repec:hal:wpspec:info:hdl:2441/10191 is not listed on IDEAS
    15. Puga, Diego, 1999. "The rise and fall of regional inequalities," European Economic Review, Elsevier, vol. 43(2), pages 303-334, February.
    16. Belleflamme, Paul & Picard, Pierre & Thisse, Jacques-Francois, 2000. "An Economic Theory of Regional Clusters," Journal of Urban Economics, Elsevier, vol. 48(1), pages 158-184, July.
    17. Pierre-Philippe Combes & Miren Lafourcade, 2005. "Transport costs: measures, determinants, and regional policy implications for France," Journal of Economic Geography, Oxford University Press, vol. 5(3), pages 319-349, June.
    18. Isabelle Thomas, 2002. "Transportation Networks and the Optimal Location of Human Activities," Books, Edward Elgar Publishing, number 2436.
    19. Gianmarco Ottaviano & Takatoshi Tabuchi & Jacques-François Thisse, 2021. "Agglomeration And Trade Revisited," World Scientific Book Chapters, in: Firms and Workers in a Globalized World Larger Markets, Tougher Competition, chapter 3, pages 59-85, World Scientific Publishing Co. Pte. Ltd..
    20. Charlot, Sylvie & Gaigne, Carl & Robert-Nicoud, Frederic & Thisse, Jacques-Francois, 2006. "Agglomeration and welfare: The core-periphery model in the light of Bentham, Kaldor, and Rawls," Journal of Public Economics, Elsevier, vol. 90(1-2), pages 325-347, January.
    21. Pines,David & Sadka,Efraim & Zilcha,Itzhak (ed.), 1998. "Topics in Public Economics," Cambridge Books, Cambridge University Press, number 9780521561365.
    22. Clark, Ximena & Dollar, David & Micco, Alejandro, 2004. "Port efficiency, maritime transport costs, and bilateral trade," Journal of Development Economics, Elsevier, vol. 75(2), pages 417-450, December.
    23. Micco, Alejandro & Serebrisky, Tomas, 2006. "Competition regimes and air transport costs: The effects of open skies agreements," Journal of International Economics, Elsevier, vol. 70(1), pages 25-51, September.
    24. Hummels, David & Lugovskyy, Volodymyr & Skiba, Alexandre, 2009. "The trade reducing effects of market power in international shipping," Journal of Development Economics, Elsevier, vol. 89(1), pages 84-97, May.
    25. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    26. Masahisa Fujita & Jacques-François Thisse, 2006. "Globalization And The Evolution Of The Supply Chain: Who Gains And Who Loses?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(3), pages 811-836, August.
    27. Edward L. Glaeser & Janet E. Kohlhase, 2004. "Cities, regions and the decline of transport costs," Advances in Spatial Science, in: Raymond J. G. M. Florax & David A. Plane (ed.), Fifty Years of Regional Science, pages 197-228, Springer.
    28. Mohammed, Saif I. Shah & Williamson, Jeffrey G., 2004. "Freight rates and productivity gains in British tramp shipping 1869-1950," Explorations in Economic History, Elsevier, vol. 41(2), pages 172-203, April.
    29. David L. Hummels & Georg Schaur, 2013. "Time as a Trade Barrier," American Economic Review, American Economic Association, vol. 103(7), pages 2935-2959, December.
    30. Alberto F. Ades & Edward L. Glaeser, 1995. "Trade and Circuses: Explaining Urban Giants," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(1), pages 195-227.
    31. repec:hal:spmain:info:hdl:2441/10191 is not listed on IDEAS
    32. Tabuchi, Takatoshi & Thisse, Jacques-Francois, 2002. "Taste heterogeneity, labor mobility and economic geography," Journal of Development Economics, Elsevier, vol. 69(1), pages 155-177, October.
    33. Piet Rietveld & Roger Vickerman, 2004. "Transport in regional science: The “death of distance” is premature," Advances in Spatial Science, in: Raymond J. G. M. Florax & David A. Plane (ed.), Fifty Years of Regional Science, pages 229-248, Springer.
    34. Behrens, Kristian & Gaigne, Carl & Ottaviano, Gianmarco I.P. & Thisse, Jacques-Francois, 2007. "Countries, regions and trade: On the welfare impacts of economic integration," European Economic Review, Elsevier, vol. 51(5), pages 1277-1301, July.
    35. David Hummels & Volodymyr Lugovskyy, 2006. "Are Matched Partner Trade Statistics a Usable Measure of Transportation Costs?," Review of International Economics, Wiley Blackwell, vol. 14(1), pages 69-86, February.
    36. Karen Helene Midelfart-Knarvik & Henry G. Overman, 2002. "Delocation and European integration: is structural spending justified? [‘Specialization patterns in Europe’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 17(35), pages 321-359.
    37. Roger Vickerman & Klaus Spiekermann & Michael Wegener, 1999. "Accessibility and Economic Development in Europe," Regional Studies, Taylor & Francis Journals, vol. 33(1), pages 1-15.
    38. BEHRENS, Kristian & LAMORGESE, Andrea R. & OTTAVIANO, Gianmarco I.P. & TABUCHI, Takatoshi, 2005. "Testing the ‘home market effect’ in a multi-country world," LIDAM Discussion Papers CORE 2005055, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    39. Edward E Leamer & Michael Storper, 2001. "The Economic Geography of the Internet Age," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 32(4), pages 641-665, December.
    40. Dominique Peeters & Jacques Thisse & Isabelle Thomas, 1998. "Transportation networks and the location of human activities," ERSA conference papers ersa98p268, European Regional Science Association.
    41. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555, January.
    42. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," Journal of Economic Literature, American Economic Association, vol. 42(3), pages 691-751, September.
    43. Carolyn L. Evans & James Harrigan, 2005. "Distance, Time, and Specialization: Lean Retailing in General Equilibrium," American Economic Review, American Economic Association, vol. 95(1), pages 292-313, March.
    44. Martin, Philippe & Rogers, Carol Ann, 1995. "Industrial location and public infrastructure," Journal of International Economics, Elsevier, vol. 39(3-4), pages 335-351, November.
    45. Tabuchi, Takatoshi, 1998. "Urban Agglomeration and Dispersion: A Synthesis of Alonso and Krugman," Journal of Urban Economics, Elsevier, vol. 44(3), pages 333-351, November.
    46. Richard E. Baldwin & Toshihiro Okubo, 2006. "Heterogeneous firms, agglomeration and economic geography: spatial selection and sorting," Journal of Economic Geography, Oxford University Press, vol. 6(3), pages 323-346, June.
    47. Kristian Behrens, 2006. "Do changes in transport costs and tariffs shape the space‐economy in the same way?," Papers in Regional Science, Wiley Blackwell, vol. 85(3), pages 379-399, August.
    48. Gilles Duranton & Vassilis Monastiriotis, 2002. "Mind the Gaps: The Evolution of Regional Earnings Inequalities in the U.K., 1982–1997," Journal of Regional Science, Wiley Blackwell, vol. 42(2), pages 219-256, May.
    49. Gianmarco I P Ottaviano & Jacques-François Thisse, 2005. "New Economic Geography: What about the N?," Environment and Planning A, , vol. 37(10), pages 1707-1725, October.
    50. Ottaviano, Gianmarco I. P. & Thisse, Jacques-Francois, 2002. "Integration, agglomeration and the political economics of factor mobility," Journal of Public Economics, Elsevier, vol. 83(3), pages 429-456, March.
    51. Cavailhes, Jean & Gaigne, Carl & Tabuchi, Takatoshi & Thisse, Jacques-Francois, 2007. "Trade and the structure of cities," Journal of Urban Economics, Elsevier, vol. 62(3), pages 383-404, November.
    52. David Hummels, 2007. "Transportation Costs and International Trade in the Second Era of Globalization," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 131-154, Summer.
    53. Forslid, Rikard & Haaland, Jan I. & Midelfart Knarvik, Karen Helene, 2002. "A U-shaped Europe?: A simulation study of industrial location," Journal of International Economics, Elsevier, vol. 57(2), pages 273-297, August.
    54. d'Aspremont, C & Gabszewicz, Jean Jaskold & Thisse, J-F, 1979. "On Hotelling's "Stability in Competition"," Econometrica, Econometric Society, vol. 47(5), pages 1145-1150, September.
    55. Faini, Riccardo, 1999. "Trade unions and regional development," European Economic Review, Elsevier, vol. 43(2), pages 457-474, February.
    56. Carsten Fink & Aaditya Mattoo & Ileana Cristina Neagu, 2002. "Trade in International Maritime Services: How Much Does Policy Matter?," The World Bank Economic Review, World Bank, vol. 16(1), pages 81-108, June.
    57. Knapp, Thomas A. & Graves, Philip E., 1989. "On the role of amenities in models of migration and regional development," MPRA Paper 19914, University Library of Munich, Germany.
    58. repec:hhs:iuiwop:430 is not listed on IDEAS
    59. Anas, Alex, 1983. "Discrete choice theory, information theory and the multinomial logit and gravity models," Transportation Research Part B: Methodological, Elsevier, vol. 17(1), pages 13-23, February.
    60. Hummels, David, 2001. "Time As A Trade Barrier," Working papers 28701, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    61. Behrens, Kristian, 2004. "Agglomeration without trade: how non-traded goods shape the space-economy," Journal of Urban Economics, Elsevier, vol. 55(1), pages 68-92, January.
    62. Takanori Ago & Ikumo Isono & Takatoshi Tabuchi, 2006. "Locational disadvantage of the hub," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 40(4), pages 819-848, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Miren Lafourcade & Jacques-François Thisse, 2011. "New Economic Geography: The Role of Transport Costs," Chapters, in: André de Palma & Robin Lindsey & Emile Quinet & Roger Vickerman (ed.), A Handbook of Transport Economics, chapter 4, Edward Elgar Publishing.
    2. Stef Proost & Jacques-François Thisse, 2019. "What Can Be Learned from Spatial Economics?," Journal of Economic Literature, American Economic Association, vol. 57(3), pages 575-643, September.
    3. Maria Florencia Granato, 2011. "REGIONAL NEW ECONOMIC GEOGRAPHY (refereed paper)," ERSA conference papers ersa10p747, European Regional Science Association.
    4. Ottaviano, Gianmarco & Thisse, Jacques-Francois, 2004. "Agglomeration and economic geography," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 58, pages 2563-2608, Elsevier.
    5. Kristian Behrens & Frédéric Robert‐Nicoud, 2009. "Krugman's Papers in Regional Science: The 100 dollar bill on the sidewalk is gone and the 2008 Nobel Prize well‐deserved," Papers in Regional Science, Wiley Blackwell, vol. 88(2), pages 467-489, June.
    6. Stephen J. Redding, 2013. "Economic Geography: A Review of the Theoretical and Empirical Literature," Palgrave Macmillan Books, in: Daniel Bernhofen & Rod Falvey & David Greenaway & Udo Kreickemeier (ed.), Palgrave Handbook of International Trade, chapter 16, pages 497-531, Palgrave Macmillan.
    7. José M. Gaspar, 2018. "A prospective review on New Economic Geography," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 61(2), pages 237-272, September.
    8. Carl Gaigné & Jacques-François Thisse, 2013. "New Economic Geography and the City," Working Papers SMART 13-02, INRAE UMR SMART.
    9. Fabien Candau, 2008. "Entrepreneurs' Location Choice And Public Policies: A Survey Of The New Economic Geography," Journal of Economic Surveys, Wiley Blackwell, vol. 22(5), pages 909-952, December.
    10. Combes, Pierre-Philippe & Lafourcade, Miren, 2011. "Competition, market access and economic geography: Structural estimation and predictions for France," Regional Science and Urban Economics, Elsevier, vol. 41(6), pages 508-524.
    11. Fujita, Masahisa & Thisse, Jacques-François, 2001. "Agglomération et marché," Cahiers d'Economie et de Sociologie Rurales (CESR), Institut National de la Recherche Agronomique (INRA), vol. 58.
    12. Joe Tharakan & Jacques-François Thisse, 2011. "Market Integration: Trade versus Economic Geography," Chapters, in: Miroslav N. Jovanović (ed.), International Handbook on the Economics of Integration, Volume II, chapter 6, Edward Elgar Publishing.
    13. Breinlich, Holger & Ottaviano, Gianmarco I.P. & Temple, Jonathan R.W., 2014. "Regional Growth and Regional Decline," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 4, pages 683-779, Elsevier.
    14. Olga Alonso-Villar, 2006. "A Reflection On The Effects Of Transport Costs Within The New Economic Geography," Working Papers 57, ECINEQ, Society for the Study of Economic Inequality.
    15. César Ducruet & Hidekazu Itoh & Olivier Joly, 2015. "Ports and the local embedding of commodity flows," Papers in Regional Science, Wiley Blackwell, vol. 94(3), pages 607-627, August.
    16. repec:esx:essedp:729 is not listed on IDEAS
    17. Pflüger, Michael & Südekum, Jens, 2008. "Integration, agglomeration and welfare," Journal of Urban Economics, Elsevier, vol. 63(2), pages 544-566, March.
    18. Behrens, Kristian & Gaigne, Carl & Ottaviano, Gianmarco I.P. & Thisse, Jacques-Francois, 2007. "Countries, regions and trade: On the welfare impacts of economic integration," European Economic Review, Elsevier, vol. 51(5), pages 1277-1301, July.
    19. Jian Wang & Junqian Xu, 2015. "Home market effect, spatial wages disparity: an empirical reinvestigation of China," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 55(2), pages 313-333, December.
    20. Olga Alonso‐Villar, 2008. "A model of economic geography with demand‐pull and congestion costs," Papers in Regional Science, Wiley Blackwell, vol. 87(2), pages 261-276, June.
    21. Patricia Sourdin & Richard Pomfret, 2012. "Trade Facilitation," Books, Edward Elgar Publishing, number 14596.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:wpaper:halshs-00586878. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.