Tax competition between two countries is considered in a trade- and-location setting with differentiated products and monopolistic competition. There are two groups of workers, mobile ones and immobile ones. Taxes are used for producing a public good. It is shown that an equilibrium with mobile...

We develop an analytically solvable version of the central model of 'new economic geography', the so called core-periphery model by Krugman. While the modified model reproduces all the appealing features of the original one, it also allows us to obtain additional analytical results that are out...

This paper starts out from the observation that the export shares of firms (export to sales ratio) vary greatly among firms, and tend to be systematically related to the firms' capital labour ratios. This observation cannot be explained by the standard heterogeneous firms and trade model by...