Globalization and the Inequality of Nations

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ID: 290561
1995
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Abstract
A monopolistically competitive manufacturing sector produces goods used for final consumption and as intermediates. Intermediate usage creates cost and demand linkages between firms and a tendency for manufacturing agglomeration. How does globalization affect the location of manufacturing and gains from trade? At high transport costs all countries have some manufacturing, but when transport costs fall below a critical value, a core-periphery spontaneously forms, and nations that find themselves in the periphery suffer a decline in real income. At still lower transport costs there is convergence of real incomes, in which peripheral nations gain and core nations may lose.
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openalex_W2138113372 Use this key to autocite in the manuscript while using SciMatic Manuscript Manager or Thesis Manager
Authors Paúl Krugman, Anthony J. Venables
Journal the quarterly journal of economics
Year 1995
DOI
10.2307/2946642
URL
https://doi.org/10.2307/2946642
Keywords Keywords not found

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