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Does technological progress magnify regional disparities?

Author

Listed:
  • Tabuchi, Takatoshi
  • Thisse, Jacques François
  • Zhu, Xiwei

Abstract

We study how technological progress in manufacturing and transportation to-gether with migration costs interact to shape the space-economy. Rising labor productivity in the manufacturing sector fosters the agglomeration of activities, whereas falling transport costs associated with technological and organizational in-novations fosters their dispersion. Since these two forces have been at work for a long time, the final outcome must depend on how drops in the costs of producing and trading goods interact with the various costs borne by migrants. Finally, when labor is heterogeneous, the most efficient workers of the less productive region are the first to move to the more productive region.

Suggested Citation

  • Tabuchi, Takatoshi & Thisse, Jacques François & Zhu, Xiwei, 2016. "Does technological progress magnify regional disparities?," IDE Discussion Papers 599, Institute of Developing Economies, Japan External Trade Organization(JETRO).
  • Handle: RePEc:jet:dpaper:dpaper599
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    References listed on IDEAS

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    More about this item

    Keywords

    Economic geography; Labor productivity; Manufacturing industries; Transportation; New economic geography; Technological progress; Migration costs; Labor heterogeneity;

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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