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Geography, Trade Patterns, and Economic Policy

Author

Listed:
  • Carlos M. Asilis
  • Luis Rivera-Batiz

Abstract

This paper presents a geographical theory of location and interregional trade. Location is treated as an endogenous variable by firms, consumers and perfectly mobile workers in a two-sector economy. Space plays a central role owing to transportation costs, market access, and distance from polluting industrial centers. The model is used to examine: (1) aspects of a compensating-differential theory of regional unevenness, (2) the theoretical formulation of a gravity theory of trade patterns, (3) the geographic basis for industrial and environmental policy, and (4) the interaction between reductions in transportation costs, location patterns, and technological improvements.

Suggested Citation

  • Carlos M. Asilis & Luis Rivera-Batiz, 1994. "Geography, Trade Patterns, and Economic Policy," IMF Working Papers 94/16, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:94/16
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    Citations

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    Cited by:

    1. Alberto Franco Pozzolo, 2004. "Research and Development, Regional Spillovers and the Location of Economic Activities," Manchester School, University of Manchester, vol. 72(4), pages 463-482, July.
    2. Mikael Petitjean, 2000. "Les effets de la globalisation sur les inégalités régionales : quelques apports fondamentaux de l'économie géographique," Revue Tiers Monde, Programme National Persée, vol. 41(164), pages 775-790.
    3. Hanson, Gordon H., 1998. "Regional adjustment to trade liberalization," Regional Science and Urban Economics, Elsevier, vol. 28(4), pages 419-444, July.
    4. G. Ottaviano, 1995. "A Geographic Approach to International Economics: 'Strategic Trade Policy'?," Working Papers 216, Dipartimento Scienze Economiche, Universita' di Bologna.
    5. Junius, Karsten, 1996. "Limits to industrial agglomeration," Kiel Working Papers 762, Kiel Institute for the World Economy (IfW).
    6. A. Porojan, 2001. "Trade Flows and Spatial Effects: The Gravity Model Revisited," Open Economies Review, Springer, vol. 12(3), pages 265-280, July.
    7. Katrin Elborgh-Woytek, 2003. "Of Openess and Distance; Trade Developments in the Commonwealth of Independent States, 1993-2002," IMF Working Papers 03/207, International Monetary Fund.

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