Industrial agglomerations and wage gradients: the Spanish economy in the interwar period

Daniel Tirado-Fabregat, Jordi Pons Novell and Elisenda Paluzie ()

No 103, Working Papers in Economics from Universitat de Barcelona. Espai de Recerca en Economia

Abstract: This paper gives new evidence on the relationship between integration and industrial agglomeration in the presence of scale economies, by testing directly one of the predictions that can be derived from Krugman (1991), that is, the existence of regional nominal wage gradients and its transformation following changes in trade regimes. Our case study analyzes the effects of the substitution of an open economy by a closed economy regime, exactly the opposite process studied by Hanson (1996, 1997). In Spain, during the interwar period, protectionist policies would have favored the loss of centrality of the coastal location (Barcelona) and the relative rise of central locations (such as Madrid). Our results indicate the existence of a wage gradient centered in Barcelona during the interwar period (1914-1930) and its weakening after 1925.

JEL-codes: F14 F15 F16 N63 R12 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2003
New Economics Papers: this item is included in nep-ure
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Citations: View citations in EconPapers (8)

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