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The effects of transport costs within the new economic geography

  • Olga Alonso-Villar

In the last few years a great number of works, involved in what has been called the New Economic Geography, have been focused on explaining the causes of agglomeration in a framework of monopolistic competition à la Dixit-Stiglitz. The purpose of this paper is to analyze, in the light of these theories, the spatial consequences of reductions in transport costs between locations (cities, regions and countries), showing the key assumptions which explain the differences between the results obtained in some of these works. The results show that the spatial pattern of production after these reductions strongly depend on the population’s mobility/immobility, on the dispersion force considered in the model and also on trade cost modeling.

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Paper provided by Universidade de Vigo, Departamento de Economía Aplicada in its series Working Papers with number 0502.

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Length: 40 pages
Date of creation: Feb 2005
Date of revision:
Handle: RePEc:vig:wpaper:0502
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  1. Olga Alonso-Villar, 2005. "The effects of transport costs revisited," Journal of Economic Geography, Oxford University Press, vol. 5(5), pages 589-604, October.
  2. Philippe Martin & Gianmarco Ottaviano, 1996. "Growth and Agglomeration," Working Papers 1996-14, CEPII research center.
    • 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 947-68, November.
  3. Schmutzler, Armin, 1999. " The New Economic Geography," Journal of Economic Surveys, Wiley Blackwell, vol. 13(4), pages 355-79, September.
  4. Fujita , Masahisa & Krugman, Paul, 2004. "The new economic geography: Past, present and the future," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 4, pages 177-206.
  5. Raul Livas Elizondo & Paul Krugman, 1992. "Trade Policy and the Third World Metropolis," NBER Working Papers 4238, National Bureau of Economic Research, Inc.
  6. Luis Fernando Lanaspa & Fernando Sanz, 1999. "Krugman's Core-Periphery Model with Heterogeneous Quality of Land," Urban Studies, Urban Studies Journal Limited, vol. 36(3), pages 499-507, March.
  7. Edward L. Glaeser & Janet E. Kohlhase, 2003. "Cities, Regions and the Decline of Transport Costs," Harvard Institute of Economic Research Working Papers 2014, Harvard - Institute of Economic Research.
  8. Monfort, Philippe & van Ypersele, Tanguy, 2003. "Integration, Regional Agglomeration and International Trade," CEPR Discussion Papers 3752, C.E.P.R. Discussion Papers.
  9. PICARD, Pierre & ZENG, Dao-Zhi, 2003. "Agricultural sector and industrial agglomeration," CORE Discussion Papers 2003022, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  10. Elisenda Paluzie Hernandez, 1999. "Trade policy and regional inequalities," Working Papers in Economics 48, Universitat de Barcelona. Espai de Recerca en Economia.
  11. TABUCHI, Takatoshi & THISSE, Jacques-François, . "Taste heterogeneity, labor mobility and economic geography," CORE Discussion Papers RP 1570, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  12. Olga Alonso-Villar, 2002. "Urban agglomeration: Knowledge spillovers and product diversity," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 36(4), pages 551-573.
  13. Henderson, J. Vernon, 1986. "Efficiency of resource usage and city size," Journal of Urban Economics, Elsevier, vol. 19(1), pages 47-70, January.
  14. Monfort, Philippe & Nicolini, Rosella, 2000. "Regional Convergence and International Integration," Journal of Urban Economics, Elsevier, vol. 48(2), pages 286-306, September.
  15. Martin, Philippe & Rogers, Carol Ann, 1995. "Industrial location and public infrastructure," Journal of International Economics, Elsevier, vol. 39(3-4), pages 335-351, November.
  16. Krugman, Paul & Venables, Anthony J., 1995. "Globalization and the Inequality of Nations," Working Paper Series 430, Research Institute of Industrial Economics.
  17. Olga Alonso-Villar & José-María Chamorro-Rivas & Xulia González-Cerdeira, 2001. "Agglomeration economies in manufacturing industries: the case of Spain," Working Papers 0202, Universidade de Vigo, Departamento de Economía Aplicada.
  18. Glaeser, Edward L & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1992. "Growth in Cities," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1126-52, December.
    • Edward L. Glaeser & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1991. "Growth in Cities," NBER Working Papers 3787, National Bureau of Economic Research, Inc.
    • Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
  19. Olga Alonso-Villar, 2000. "Large metropolises in the Third World: an explanation," Working Papers 0004, Universidade de Vigo, Departamento de Economía Aplicada.
  20. Paul Krugman, 1992. "A Dynamic Spatial Model," NBER Working Papers 4219, National Bureau of Economic Research, Inc.
  21. Bjorvatn, Kjetil, 1999. "Third World regional integration," European Economic Review, Elsevier, vol. 43(1), pages 47-64, January.
  22. Forslid, Rikard & Haaland, Jan I. & Ulltveit-Moe, Karen-Helene, 1999. "A U-Shaped Europe? A Simulation Study of Industrial Location," CEPR Discussion Papers 2247, C.E.P.R. Discussion Papers.
  23. Olga Alonso-Villar & José-María Chamorro-Rivas, 2001. "How do producer services affect the location of manufacturing firms? The role of information accessibility," Environment and Planning A, Pion Ltd, London, vol. 33(9), pages 1621-1642, September.
  24. repec:hhs:iuiwop:430 is not listed on IDEAS
  25. Olga Alonso-Villar, 2001. "Metropolitan areas and public infrastructure," Investigaciones Economicas, Fundación SEPI, vol. 25(1), pages 139-169, January.
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