Studies have suggested that there exists job search and recruiting friction in urban areas. This paper constructs a two-sector (rural and urban) model involving this factor and investigates how it affects migration and what the optimal policies should be. An analysis shows that frictional urban...

The rank-size rule and Zipf's law for city sizes have been traditionally examined by means of OLS estimation and the "t" test. This paper studies the accurate and approximate properties of the OLS estimator and obtains the distribution of the "t" statistic under the assumption of Zipf's law...

We investigate how cross-country differences in firms' fixed set-up costs affect the trade-off between global efficiency and spatial equity. Our analysis reveals that the standard assumption of symmetry in set-up costs masks the existence of an interesting effect: the range of available...