Large metropolises in the Third World: an explanation
In this paper we have developed a model that sets out to explain the existence of megacities in developing countries, in the context of a core-periphery model à la Krugman. As in Krugman and Livas Elizondo (1996), this paper also suggests that agglomeration can be fostered by manufacturers mainly serving the domestic market. However, the analysis goes further by emphasizing that megacities are not only the result of protective trade policies, but also the consequence of the relative position of a country, in terms of industrialization, with respect to the rest of the world.
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