The home market effect (HME) is a distinguishing feature of the newʺ theory of international trade, but it is uncertain whether this effect survives if one moves beyond the simplifying setup with only two countries. We present a three-country version of the seminal model by Krugman (1980) and...

Standard models of the new trade and location theories usually assume full employment and are thus ill-equipped to study spatial unemployment differences, which in reality are more pronounced that income disparities Regional labour market theories like the ´wage curve´-approach on the other...

We introduce a simple oligopolistic trade model with international transportation costs, and analyze the profitability and the social desirability of national vs. international mergers in relation to three different issues, (i) the level of trade freeness, (ii) the possibility of rent...