@techreport{NBERw4238,
 title = "Trade Policy and the Third World Metropolis",
 author = "Raul Livas Elizondo and Paul Krugman",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "4238",
 year = "1992",
 month = "December",
 URL = "http://www.nber.org/papers/w4238",
 abstract = {Many of the world's largest cities are now in developing countries. We develop a simple theoretical model, inspired by the case of Mexico, that explains the existence of such giant cities as a consequence of the strong forward and backward linkages that arise when manufacturing tries to serve a small domestic market. The model implies that these linkages are much weaker when the economy is open to international trade -- in other words, the giant Third World metropolis is an unintended by-product of import-substitution policies, and will tend to shrink as developing countries liberalize.},
}