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The Seamless World: A Spatial Model of International Specialization

  • Paul Krugman
  • Anthony J. Venables

This paper is an effort to do international trade theory without mentioning countries. Nearly all models of the international economy assume that trade takes place between nations or regions which are themselves dimensionless points. We develop a model in which economic space is instead assumed to be continuous, and in which this 'seamless world' spontaneously organizes itself into industrial and agricultural zones because of the tension between forces of agglomeration and disagglomeration. One might expect such a model to be analytically intractable, but we are able to gain considerable insight through a combination of simulations and an analytical approach originally suggested in a biological context by Alan Turing.

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File URL: http://www.nber.org/papers/w5220.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 5220.

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Date of creation: Aug 1995
Date of revision:
Handle: RePEc:nbr:nberwo:5220
Note: ITI IFM
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  1. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
  2. Krugman, Paul & Venables, Anthony J., 1995. "Globalization and the Inequality of Nations," Working Paper Series 430, Research Institute of Industrial Economics.
  3. Courant, P.N. & Deardorff, A.V., 1989. "International Trade With Lumpy Countries," Papers 90-04, Michigan - Center for Research on Economic & Social Theory.
  4. Paul Krugman, 1990. "Increasing Returns and Economic Geography," NBER Working Papers 3275, National Bureau of Economic Research, Inc.
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