We use a spatial model of endogenous growth to investigate the likely impact of discriminatory integration among two advanced insider countries on their own welfare as well as on the welfare of an outsider transition economy. A first point is that, since convergence in per capita income levels...

We identify the determinants of capital movements in an ‘augmented-Solow’ model where capital mobility is restricted to a subset of capital assets. We then test the prediction of the neoclassical model and find that it is consistent with the evidence on net capital flows in a cross-section...

This paper tackles the issue of the optimality of agglomeration in a two-region economy with skilled/mobile and unskilled/immobile workers. The market leads to the optimal outcome when transport costs are high or low. However, for intermediate values, it yields agglomeration whereas dispersion...

This paper investigates the possibility of endogenous fluctuations in the international distribution of economic activities in the presence of increasing returns, monopolistic competition, trade and convex adjustment costs without allowing for any local productive externalities. Using a...

In this paper we document a strong positive correlation of immigration flows with changes in average wages and average house rents for native residents across U.S. states. Instrumental variables estimates reveal that the correlations are compatible with a causal interpretation from immigration...

This Paper takes a broader look at how vertical linkages can trigger the spatial agglomeration of economic activity in a ‘new economic geography’ (NEG) set-up. First, it formally establishes the key positive features of a wide class of vertical-linkage models without resorting to numerical...

This paper describes the possible impact of multi-speed integration on the location of economic activities in Europe. We present a model where two countries integrate their economies and leave a third temporarily outside because of its lower income. We analyse the effect of different integration...

The effects of the quality of institutions on economic development and comparative advantage have been so far investigated separately. This paper proposes a theoretical framework in which trade patterns and growth rates are jointly determined by international differences in contract enforcement...

Increasing returns in matching between skilled workers and firms create a local thick-market externality when labour markets are geographically segmented. This generates an agglomeration force that can offset the dispersion force due to local competition in a segmented product market. When this...

This paper takes a modest step towards formalizing the theoretical interconnections among four post-Industrial-Revolution phenomena – the industrialization and growth take-off of rich ‘northern’ nations, massive global income divergence, and rapid trade expansion. Specifically, we present...