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Trade restrictions, migration, and economic geography
Schweizerische Zeitschrift Fur Volkswirtschaft Und Statistik
|September 1, 1995
Summary
This study explains rapid Third World urban growth using an economic geography model. Lower transport costs and tariffs in developing regions promote less concentrated economies, impacting global economic distribution.
Area of Science:
- Economic Geography
- Urban Economics
- Development Economics
Background:
- Third World cities have experienced significantly faster growth than those in industrialized nations over recent decades.
- Understanding the drivers of this urban expansion is crucial for development and economic policy.
Purpose of the Study:
- To investigate the reasons behind the accelerated urban growth in Third World countries compared to industrialized nations.
- To analyze the influence of transport costs and trade policies on the spatial distribution of economic activity.
Main Methods:
- Development of a Krugman-type economic geography model featuring two continents (North and South) and two regions per continent (East and West).
- Simulation and analysis of the model under varying levels of transport costs and tariffs between regions and continents.
Main Results:
- Reduced transport costs within Southern regions, potentially due to infrastructure improvements, lead to deconcentration of economic activities.
- Lower tariffs on intercontinental trade also contribute to a less concentrated economic landscape.
Conclusions:
- Transport costs and trade policies are significant determinants of economic concentration in urban areas.
- Policy interventions aimed at reducing transport costs and trade barriers in developing regions can foster more dispersed economic development.