This paper studies the evolution of regional income disparities in Europe. Besides using a more complete data set that offers a more detailed look at the evolution of regional incomes in Western Europe than previous studies, it is the first to shed empirical light on regional income differences...

Trade costs are a crucial element of New Economic Geography (NEG) models. Without trade costs there is no role for geography. In empirical NEG studies the unavailability of direct trade cost data calls for the need to approximate these trade costs by introducing a trade cost function. In doing...