The risk of default that business firms face is very significant and differs widely across countries. This paper explores the links between countries' business conditions and international trade embedment and the default risk at the country level from a theoretical point of view. Our main...

Die ungleiche Entwicklung von Städten und Regionen steht gegenwärtig nicht nur in Deutschland im Brennpunkt gesellschaftlicher und politischer Aufmerksamkeit. Die Sorge vor einem weiteren Aufreißen der Lücken zwischen Stadt und Land und zwischen Gewinner- und Verliererregionen des...

Der Beitrag liefert einen kurzen Überblick über einen neuen Zweig der Raum- und Außenwirtschaftslehre, die Neue Ökonomische Geographie. Neben den grundlegenden Mechanismen für die Erklärung der wirtschaftlichen Aktivität im Raum werden Weiterentwicklungen vorgestellt. Ein zweiter...

This paper provides a simple theory of geographical mobility which simultaneously explains people's choice of residences in space and the location of industry. Residences are chosen on the basis of the utility which mobile households obtain across locations. The spatial pattern of industry is...

This paper is motivated by the fact that, contrary to its importance in practice, the role of land for production has received no attention in the new trade theory and the new economic geography. We set up a simple monopolistic competition model and we show that, due to the factor proportions...

The core-periphery model by Krugman (1991) has two 'dramatic' implications: catastrophic agglomeration and locational hysteresis. We study this seminal model with CES instead of Cobb-Douglas upper tier preferences. This small generalization suffices to change these stark implications. For a wide...

Entrepreneurs who decide to start a business are faced with different levels of effective entry costs in different countries. These costs are heavily influenced by economic policy through entry regulation and subsidies. In this paper we present a two-country general equilibrium model with...

Entrepreneurs who decide to enter an industry are faced with different levels of effective entry costs in different countries. These costs are heavily influenced by economic policy. What is not well understood is how international trade affects the government incentive to impact on entry costs,...

Models of the new economic geography share a number of common conclusions, but also exhibit notable differences, in particular with respect to the shape of the location pattern and the efficiency of the market equilibrium. This reflects the fact that these models rely heavily on specific...

This paper studies the social desirability of agglomeration and the efficiency arguments for policy intervention in a simple, analytically solvable ‘new economic geography’ model with two trade integrating regions. The location pattern emerging as market equilibrium is “bubbleshaped”,...