Forslid, Rikard; Okubo, Toshihiro - In: European Economic Review 56 (2012) 4, pp. 747-756
This paper compares two policies: trade cost reduction and firm relocation cost reduction using a three-country version of a heterogeneous-firms geography and trade model, where the three countries have different market (population) sizes. We show how the effects of the two policies differ, in...