In this paper we estimate a sectoral real wage equation for three regional blocs of the enlarged EU that we defined as North (wealthiest EU), South (Greece, Portugal and Spain) and East (acceding Central and Eastern European countries). The estimation results show that real wages react...

This paper builds a multi-sector, three country (centre and two peripheries), New Economic Geography model, where industrial sectors differ in the degree of scale economies and skill-intensity. The model incorporates, for the first time in this class of models, payments to the unemployed in each...