Agglomeration without trade: how non-traded goods shape the space-economy
By: Behrens, Kristian.
Material type:
ArticlePublisher: 2004Description: p.68-92.Subject(s): Trade
In:
Journal of Urban EconomicsSummary: We develop a spatial general equilibrium model in which the absence of interregional trade is an endogenous outcome. Extending the model developed by Ottaviano, Tabuchi, and Thisse (Int. Econ. Rev.43 (2002)409), we show that equilibria without trade differ significantly from those obtained in the presence of trade, which suggests that the presence of non-traded goods has a significant impact on spatial structures. Somewhat surprisingly, equilibrium structures without trade are richer than those with trade because partial agglomeration becomes a feasible outcome. Equilibria now depend on the ratio of mobile to immobile factors and an increase in that ratio triggers a process of spatial agglomeration. - Reproduced.
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Articles
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Indian Institute of Public Administration | Volume no: 55, Issue no: 1 | Available | AR59989 |
We develop a spatial general equilibrium model in which the absence of interregional trade is an endogenous outcome. Extending the model developed by Ottaviano, Tabuchi, and Thisse (Int. Econ. Rev.43 (2002)409), we show that equilibria without trade differ significantly from those obtained in the presence of trade, which suggests that the presence of non-traded goods has a significant impact on spatial structures. Somewhat surprisingly, equilibrium structures without trade are richer than those with trade because partial agglomeration becomes a feasible outcome. Equilibria now depend on the ratio of mobile to immobile factors and an increase in that ratio triggers a process of spatial agglomeration. - Reproduced.
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