The Rise and Fall of Regional Inequalities

Diego Puga

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: This paper analyses how the degree of regional integration affects regional differences in production structures and income levels. With high transport costs, industry is spead across regions to meet final consumer demad. As transport costs fall, increasing returns interacting with labour mobility and/or inout-output linkages between firms create a tendency for the agglomeration of increasing returns activities. When workers migrate towards locations with more firms and higher real wages, this intensifies agglomeration. When instead workers do not move across regions, further reductions in transport costs make firms increasingly sensitive to wage differentials, leading industry to spread out again.

Date: 1996-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
https://cep.lse.ac.uk/pubs/download/DP0314.pdf (application/pdf)

Related works:
Journal Article: The rise and fall of regional inequalities (1999)
Working Paper: The Rise and Fall of Regional Inequalities (1997)
Working Paper: The rise and fall of regional inequalities (1996)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp0314

Access Statistics for this paper

More papers in CEP Discussion Papers from Centre for Economic Performance, LSE
Bibliographic data for series maintained by ().