Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/124483
Authors: 
Pflüger, Michael
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: 
The last one and a half centuries have witnessed dramatic changes in the world economy. The service (tertiary) sector, which at the beginning of the 20th century was of little importance relative to agriculture and manufacturing, has become the dominant sector today, accounting for 80% and more of value added in advanced countries and around 70% and of employment. Innovations in transport technologies and in information and communications technologies have radically reduced the costs of trading goods and have also made an increasing share of services tradeable. We propose a tractable micro-founded Ricardo-Marshall model to study the implications of the rise of the service sector and its interaction with international trade and factor mobility for the location of economic activity. Our model highlights a tension between nontradeable services which exert an agglomerative force and trade costs and comparative advantage which act as dispersion forces.
Subjects: 
services
comparative advantage
labor mobility
symmetry breaking
agglomeration structural change
JEL: 
F12
F22
R11
R12
R13
Document Type: 
Conference Paper

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