New Economic Geography (NEG) models are difficult to confront with the data, since "on the one hand, they generally emphasise the unleashing of agglomeration forces after trade liberalisation, but on the other hand, they also accomodate multiple equilibria and non-monotonicity" (Brülhart,...

We study the effects of trade integration on the regional coevolution of income, migrations and unemployment in a dynamic core-periphery model with limited labor mobility and frictions in the job matching process. Our model can help explain a recently documented empirical puzzle, i.e., the...

For more than a decade Europe has been lagging behind the US in growth of aggregate GDP, per capita GDP, productivity, employment, as well as in demographic selection of new firms and in the design of market-friendly regulations. While an increasing trade agglomeration around large "regional"...