Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/124252
Authors: 
Thisse, Jacques
Tabuchi, Takatoshi
Zhu, Xiwei
Year of Publication: 
2014
Series/Report no.: 
54th Congress of the European Regional Science Association: "Regional development & globalisation: Best practices", 26-29 August 2014, St. Petersburg, Russia
Abstract: 
New economic geography focuses on the impact of falling transport costs on the spatial distribution of activities. However, it disregards the role of technological innovations, which are central to modern economic growth, as well as the role of migration costs, which are a strong impediment to moving. We show that this neglect is unwarranted. Regardless of the level of transport costs, rising labor productivity fosters the agglomeration of activities, whereas falling transport costs do not affect the location of activities. When labor is heterogeneous, the number of workers residing in the more productive region increases by decreasing order of productive efficiency when labor productivity rises.
Subjects: 
new economic geography
technological progress
labor productivity
migration costs
labor heterogeneity
JEL: 
J61
R12
Document Type: 
Conference Paper

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