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Concentration, separation, and dispersion: Economic geography and the environment

  • Rauscher, Michael
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    The paper investigates the spatial patterns of industrial location and environmental pollution in a new-economic-geography model. Factors of production and their owners are mobile, but factor owners are not required to live in the region in which their factors are employed. Under laisser-faire, a chase-and-flee cycle of location is possible: people, who prefer a clean environment, are chased by polluting industries, which want to locate geographically close to the market. Locational patterns under optimal environmental regulation include concentration, separation, dispersion and several intermediate patterns. Moreover, it is shown that marginal changes in environmental policy may induce discrete changes in locational patterns.

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    File URL: http://econstor.eu/bitstream/10419/39752/1/610730487.pdf
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    Paper provided by University of Rostock, Institute of Economics in its series Thuenen-Series of Applied Economic Theory with number 109.

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    Date of creation: 2009
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    Handle: RePEc:zbw:roswps:109
    Contact details of provider: Postal: Ulmenstr. 69, 18057 Rostock
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    Web page: http://www.wiwi.uni-rostock.de/vwl/

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    1. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-59, December.
    2. Fabio Grazi & Jeroen C.J.M. van den Bergh & Piet Rietveld, 2006. "Modeling Spatial Sustainability: Spatial Welfare Economics versus Ecological Footprint," Working Papers 2006.5, Fondazione Eni Enrico Mattei.
    3. Baldwin, Richard E., 2001. "Core-periphery model with forward-looking expectations," Regional Science and Urban Economics, Elsevier, vol. 31(1), pages 21-49, February.
    4. Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
    5. Lange Andreas & Quaas Martin F, 2007. "Economic Geography and the Effect of Environmental Pollution on Agglomeration," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 7(1), pages 1-33, October.
    6. J. Peter Neary, 2000. "Of Hype and Hyperbolas - Introducing the new Economic Geography," Working Papers 200019, School of Economics, University College Dublin.
    7. Charles van Marrewijk, 2005. "Geographical Economics and the Role of Pollution on Location," Tinbergen Institute Discussion Papers 05-018/2, Tinbergen Institute.
    8. Hoel, Michael, 1997. " Environmental Policy with Endogenous Plant Locations," Scandinavian Journal of Economics, Wiley Blackwell, vol. 99(2), pages 241-59, June.
    9. Michael Rauscher, 1995. "Environmental regulation and the location of polluting industries," International Tax and Public Finance, Springer, vol. 2(2), pages 229-244, August.
    10. Dixit, Avinash K & Stiglitz, Joseph E, 1975. "Monopolistic Competition and Optimum Product Diversity," The Warwick Economics Research Paper Series (TWERPS) 64, University of Warwick, Department of Economics.
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