This paper analyzes how the sequential formation of free trade areas affects the volume of trade between member countries. In a three--country, three--good model, if two countries have a free trade area, and both sign a similar agreement with the third, trade between the two decreases, and...

This paper studies the long run development of U.S. counties and metro areas from 1800 to 2000. In earlier periods smaller counties converge whereas larger counties diverge. Over time, due to changes in the age composition of locations and net congestion, convergence dissipates and divergence...

This paper analyzes the decision of a group of specialized workers to form a guild and block the adoption of a new technology that does not require their specialized input. The theory predicts an inverted-U relation between guilds and market size: for small markets, firm profits are insufficient...

We propose a dynamic spatial theory to analyze the geographic impact of climate change. Agricultural and manufacturing firms locate on a hemisphere. Trade across locations is costly, firms innovate, and technology diffuses over space. Energy used in production leads to emissions that contribute...

This paper studies the recent spatial development of India. Services, and to a lesser extent manufacturing, are increasingly concentrating in high-density clusters. This stands in contrast with the United States, where in the last decades services have tended to grow fastest in medium-density...

This chapter describes how the spatial distribution of economic activity changes as economies develop and grow. We start with the relation between development and rural-urban migration. Moving beyond the coarse rural-urban distinction, we then focus on the continuum of locations in an economy...

We investigate the empirical relationship between ethnicity and culture, defined as a vector of traits reflecting norms, attitudes and preferences. Using surveys of individual values in 76 countries, we find that ethnic identity is a significant predictor of cultural values, yet that...

This paper argues that an economy's transition from Malthusian stagnation to modern growth requires markets to reach a critical size, and competition to reach a critical level of intensity. By allowing an economy to produce a greater variety of goods, a larger market makes goods more...

This Paper uses an overlapping generations model to analyse monetary policy in a two-country model with asymmetric shocks. Agents insure against risk through the exchange of a complete set of real securities. Each central bank is able to commit to the contingent monetary policy rule that...

Theory is divided on whether falling transport costs lead to more or less spatial concentration of economic activity. Using US county-level data we find that aggregate employment became more concentrated between 1972-92. This aggregate picture hides important differences between sectors though....