Table Of Contents:

Introduction 1(6)

Logic of the Book's Structure 2(1)

Readers' Guide 3(1)

Empirical Evidence 4(3)

References 5(2)

PART I: PRELIMINARIES 7(218)

The Core--Periphery Model 9(59)

Introduction 9(4)

The Symmetric CP Model 13(20)

Key Features 33(3)

Concluding Remarks and Related Literature 36(32)

Appendix 2.A: Everything You Wanted to Know about Dixit--Stiglitz but Were Afraid to Ask 38(6)

Appendix 2.B: Technicalities 44(18)

Appendix 2.C: Exogenous Asymmetries 62(4)

References 66(2)

The Footloose Capital Model 68(23)

Introduction 68(1)

The Symmetric FC Model 69(12)

Key Features 81(3)

Concluding Remarks and Related Literature 84(7)

Appendix 3.A: FC Model with Exogenous Asymmetries 84(5)

References 89(2)

The Footloose Entrepreneur Model 91(19)

Introduction 91(1)

The Symmetric FE Model 92(9)

Key Features 101(3)

Concluding Remarks and Related Literature 104(6)

Appendix 4.A: Technicalities and Exogenous Asymmetries 105(3)

References 108(2)

Linear Models 110(27)

Introduction 110(2)

The Linear FC Model 112(10)

The Linear FE Model 122(7)

Congestion in the Linear FE Model 129(5)

Concluding Remarks and Related Literature 134(3)

References 135(2)

The Constructed Capital Model 137(18)

Introduction 137(1)

The Symmetric CC Model 138(9)

The CC Model with Capital Mobility 147(2)

Key Features 149(4)

Concluding Remarks and Related Literature 153(2)

References 153(2)

Global and Local Spillovers Models 155(35)

Introduction 155(2)

The Symmetric GS Model 157(16)

The Symmetric LS Model 173(13)

Concluding Remarks and Related Literature 186(4)

References 188(2)

Vertical Linkages Models 190(35)

Introduction 190(3)

The CPVL Model 193(12)

The FCVL Model 205(6)

The FEVL Model 211(5)

Key Features of VL Models 216(2)

Concluding Remarks and Related Literature 218(7)

Appendix 8.A: Formal Stability Tests in Vertical-Linkage Models 220(3)

References 223(2)

PART II: GENERAL POLICY AND WELFARE ISSUES 225(50)

Policy and Economic Geography: What's New? 227(16)

Introduction 227(1)

Threshold Effects, Discontinuities and Hysteresis 227(5)

General Non-Linear Effects 232(2)

Interaction Terms: Trade Freeness Also Matters 234(2)

Selection Effects 236(1)

Coordination Effects 237(2)

Concluding Remarks and Related Literature 239(4)

Appendix 9.A. Heterogeneous Moving Costs among the Agents 239(3)

References 242(1)

A Typology of Welfare Effects: Regional Perspective 243(9)

Introduction 243(1)

Organizing Framework 243(3)

Dixit--Stiglitz Preferences 246(3)

Allowing for Variable Factor Supplies 249(1)

Allowing for Endogenous Growth 250(2)

References 251(1)

Efficiency, Equity and Optimal Agglomeration 252(23)

Introduction 252(1)

Equity and Efficiency in the Footloose Capital Model 253(9)

Symmetric Footloose Entrepreneur Model 262(10)

Conclusion 272(3)

References 273(2)

PART III: TRADE POLICY 275(88)

Unilateral Trade Policy 277(40)

Introduction 277(1)

Price-Lowering Protection (PLP) 278(19)

Liberalization and Industrialization 297(5)

Industrial Development, Market Size and Comparative Advantage 302(4)

Location and Policy Non-Equivalences 306(9)

Concluding Remarks 315(2)

References 316(1)

Reciprocal Trade Agreements 317(13)

Introduction 317(1)

The Model 317(2)

Symmetric Liberalization and Delocation 319(2)

Trade Liberalization without Delocation 321(6)

Avoiding Delocation via International Transfers 327(1)

Concluding Comments 328(2)

References 329(1)

Preferential Trade Agreements 330(33)

Introduction 330(1)

The Multi-Nation Footloose Capital Model 331(3)

Production Shifting and Investment Diversion 334(7)

Domino Effects and Endogenous Bloc Size 341(3)

Hubs and Spokes: The Hub Effect 344(3)

Free Trade Areas and Internal Catastrophes 347(13)

Concluding Remarks and Related Literature 360(3)

References 360(3)

PART IV: TAX POLICY 363(60)

Agglomeration with Taxation and Public Goods 365(26)

Introduction 365(1)

The Standard Tax Competition Literature 366(6)

Lumpy World Taxes: Immobility of Perfectly Mobile Capital 372(2)

Agglomeration and the Tax Gap: the CP Thought Experiment 374(3)

Taxes with Symmetric Countries 377(7)

Tax-Financed Public Goods as a Destabilizing Force 384(1)

Duelling Public Amenities: a Modified Tiebout Hypothesis 385(2)

Redistributive Taxes: Openness and Taxation of Mobile Factors 387(1)

Concluding Remarks 388(3)

References 389(2)

Tax Competition and Agglomeration 391(32)

Introduction 391(1)

Tax Competition between Similar Countries: Simplest Case 391(7)

Harmless Tax Competition: Tiebout and Agglomeration 398(4)

Tax Competition and Capital Mobility 402(5)

Tax Competition and Catastrophic Agglomeration 407(4)

Uneven Tax Competition and Asymmetric Nations: Race to the Top and Bottom 411(10)

Concluding Remarks and Related Literature 421(2)

References 422(1)

PART V: REGIONAL POLICY 423(58)

Infrastructure Policies and Economic Geography 425(23)

Introduction 425(1)

Public Policies: Growth and Geography Effects 425(11)

Agglomeration, Congestion and Growth 436(5)

Non-Linear Effects of Public Policies 441(3)

Concluding Remarks and Related Literature 444(4)

References 446(2)

Political Economics of Regional Subsidies 448(24)

Introduction 448(1)

The Augmented FC Model 449(5)

The Vote Market Effect 454(10)

The Role of the Electoral System in a Decentralized State 464(2)

Legislative Bargaining and Strategic Delegation 466(3)

Concluding Comments 469(3)

References 471(1)

Concluding Remarks and Directions for Future Research 472(9)

Summary of Insights 472(5)

Future Research 477(4)

References 479(2)
Index 481