Italy's competitiveness problem ultimately concerns the productivity of its firms and the quality of its products. To stimulate productivity growth and upgrade the quality of products, there must be room for quot;creative destructionquot; through competition within a fair and transparent...

We model an industry in which a discrete number of firms choose the output of their differentiated products deciding whether or not to consider the impact of their decisions on aggregate output. We show that two threshold numbers of firms exist such that: below the lower one there is a unique...

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...