Trade restrictions, migration, and economic geography

"This paper investigates why Third World cities have been growing in the last several decades much more quickly than cities in industrialized countries. For this purpose, we develop a Krugman-type model of economic geography with two continents, North and South, each of which consisting of two regions, East and West. We study the impact different levels of transport costs and tariffs exert on the distribution of economic activities among the regions. We find that lower costs for transport between the regions in the South, for instance, induced by an improved infrastructure, as well as lower tariffs on intercontinental trade tend to lead to less concentrated economies." (SUMMARY IN GER AND FRE)