We present a model where long-run growth and industrial location are jointly endogenous by introducing Romerian product innovation growth into Krugman's core-periphery model. We focus on stability, showing that growth is a powerful centripetal force, but that knowledge spillovers are a powerful...

The authors study interactions between goods trade and international factor mobility in a context suggestive of transition in Central and Eastern Europe. If complementarities between skilled labor and capital are strong--e.g., owing to externalities between skilled labor and costs of absorbing...