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New Economic Geography

Hans-Friedrich Eckey and Reinhold Kosfeld ()

No 65, Volkswirtschaftliche Diskussionsbeiträge from University of Kassel, Faculty of Economics and Management

Abstract: The standard model of New Economic Geography (NEG) presents a synthesis of polarization and neo-classical theories. Within a monopolistic competition framework it aims to explain processes of concentration and deconcentration of manufacturing in a two-sector economy. In this paper the effects of several assumptions of spatial agglomeration processes are addressed. In particular, we investigate the effects of transport costs for agricultural goods, spatial spillovers, the presence of non-tradable services and limited mobility of the labour force. It becomes clear that the tendency towards deconcentration of manufacturing is more marked the higher the transport costs for agricultural goods, the stronger the positive spillovers across the regions, the more income spent on services, the more limited the mobility of the labour force.

Keywords: Neue Ökonomische Geographie; Transportkosten; nicht handelbare Dienstleistungen; Spillovers; New Economic Geography; transport costs; non-tradable services; spillovers (search for similar items in EconPapers)
JEL-codes: R10 R12 (search for similar items in EconPapers)
Date: 2004
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