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The Core-Periphery Model and Endogenous Growth: Stabilising and De-Stabilising Integration

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  • Richard E. Baldwin
  • Rikard Forslid

Abstract

traditionally seen only in terms of trade costs, many aspects of economic integration are more naturally viewed as lowering the cost of trading information rather than goods, i.e. as reducing the extent to which learning externalities are localised. Raising learning spillovers is stabilising, so integration may encourage geographic dispersion (the traditional result is that integration tends to encourage agglomeration). This may be useful for evaluating real-world regional policies e.g. subsidisation of universities, technical colleges and high-technology industrial parks in disadvantaged regions that are aimed at combating the localisation of learning externalities. Finally we show that agglomeration of industry is favourable to growth and that this growth effect can mitigate, but not reverse, losses suffered by residents of the periphery when catastrophic agglomeration occurs.

Suggested Citation

  • Richard E. Baldwin & Rikard Forslid, 1999. "The Core-Periphery Model and Endogenous Growth: Stabilising and De-Stabilising Integration," NBER Working Papers 6899, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:6899
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    References listed on IDEAS

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    1. Baldwin, Richard E. & Forslid, Rikard, 2000. "Trade liberalisation and endogenous growth: A q-theory approach," Journal of International Economics, Elsevier, vol. 50(2), pages 497-517, April.
    2. van de Klundert, Theo & Smulders, Sjak, 1996. "North-South knowledge spillovers and competition: convergence versus divergence," Journal of Development Economics, Elsevier, vol. 50(2), pages 213-232, August.
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    5. Robert J. Barro & Paul Romer, 1993. "Economic Growth," NBER Books, National Bureau of Economic Research, Inc, number barr93-1.
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    6. Martin, Philippe & Ottaviano, Gianmarco I P, 2001. "Growth and Agglomeration," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(4), pages 947-968, November.
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    Cited by:

    1. Baldwin, Richard E. & Martin, Philippe, 2004. "Agglomeration and regional growth," 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 60, pages 2671-2711 Elsevier.
    2. Michael Roos, 2003. "Internationale Integration und die Neue Ökonomische Geographie," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 4(1), pages 107-121, February.
    3. Rita De Siano & Marcella D'Uva, 2010. "Specialization and growth in Italy: what spatial econometric analysis tells us," Discussion Papers 1_2010, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.
    4. Sidorov, Alexander, 2011. "The Impact of Exogenous Asymmetry on Trade and Agglomeration in Core-Periphery Model," MPRA Paper 29627, University Library of Munich, Germany.
    5. Luca, Spinesi, 2005. "Vertical and Horizontal Innovation : Effects of Globalization and Migration on Inequality, Growth and Human Capital Accumulation," Discussion Papers (ECON - Département des Sciences Economiques) 2005028, Université catholique de Louvain, Département des Sciences Economiques.
    6. Wolfgang Keller, 2001. "The Geography and Channels of Diffusion at the World's Technology Frontier," NBER Working Papers 8150, National Bureau of Economic Research, Inc.
    7. Commander, Simon & Kangasniemi, Mari & Winters, L. Alan, 2003. "The Brain Drain: Curse or Boon?," IZA Discussion Papers 809, Institute for the Study of Labor (IZA).
    8. Berliant, Marcus & Wang, Ping, 2008. "Urban growth and subcenter formation: A trolley ride from the Staples Center to Disneyland and the Rose Bowl," Journal of Urban Economics, Elsevier, vol. 63(2), pages 679-693, March.
    9. Christophe Heyndrickx & Natalia Tourdyeva & Victoria Alexeeva-Talebi, 2011. "The SUSTRUS model: a CGE model on regional level for sustainability policies in Russia," ERSA conference papers ersa11p1565, European Regional Science Association.
    10. Gao, Ting, 2007. "Trade costs, international production shifting, and growth," European Economic Review, Elsevier, vol. 51(2), pages 317-335, February.
    11. Alberto Franco Pozzolo, 2004. "Endogenous growth in open economies: a surveys," Temi di discussione (Economic working papers) 527, Bank of Italy, Economic Research and International Relations Area.
    12. Miguel Angel Quiroga Suazo, 2002. "Agglomeration economies: influence on the distribution of foreign investment in Chile," Estudios de Economia, University of Chile, Department of Economics, vol. 29(1 Year 20), pages 139-163, June.
    13. Anna Iara & Iulia Traistaru, 2004. "Integration, Regional Specialization and Growth Differentials in EU Acceding Countries: Evidence from Hungary," ERSA conference papers ersa04p298, European Regional Science Association.

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    JEL classification:

    • F1 - International Economics - - Trade
    • F2 - International Economics - - International Factor Movements and International Business

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