NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
loading...

Agglomeration and Endogenous Capital

Richard E. Baldwin

NBER Working Paper No. 6459
Issued in March 1998
NBER Program(s):International Trade and Investment

The new' economic geography focuses on the footloose-labor and the vertically-linked-industries models. Both are complex since they feature demand-linked and cost-linked agglomeration forces. I present a simpler model where agglomeration stems from demand-linked forces arising from endogenous capital with forward-looking agents. The model's simplicity permits many analytic results (rare in economic geography). Trade-cost levels that trigger catastrophic agglomeration are identified analytically, liberalization between almost equal-sized nations is shown to entail near-catastrophic' agglomeration, and Krugman's informal stability test is shown to be equivalent to formal tests in a fully specified dynamic model.

download in pdf format
   (1327 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w6459

Published: European Economic Review, Vol.43, no.2 (1999): 253-280. citation courtesy of

Users who downloaded this paper also downloaded* these:
Kane and Wilson w6451 A Contracting-Theory Interpretation of the Origins of Federal Deposit Insurance
Goulder, Parry, Williams, and Burtraw w6464 The Cost-Effectiveness of Alternative Instruments for Environmental Protection in a Second-Best Setting
Borenstein and Bushnell w6463 An Empirical Analysis of the Potential for Market Power in California's Electricity Industry
Baldwin, Martin, and Ottaviano w6458 Global Income Divergence, Trade and Industrializatiion: The Geography of Growth Take-Offs
Krugman w3275 Increasing Returns and Economic Geography
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us