English, Article edition: Divergence, Wage-Gap and Geography Frederic Andres

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Physical Description
  • article
Language
  • English

Edition details

Title
  • Divergence, Wage-Gap and Geography
Author
  • Frederic Andres
Physical Description
  • article
Notes
  • We develop a geographic growth model where nominal wages are allowed to diverge between the two considered countries. Removing the standard assumption entailing that both countries always own a traditional sector, we argue that, as trade gets freer, the traditional sector of one country might cease to exist so that wages increase: it gives rise to an additional dispersion force independent of trade costs. Hence, the core-periphery outcome might never be reached, which contradicts previous literature’s results. We also question a hallmark of the literature since we argue that full agglomeration of firms might actually lead to slower growth for both countries.
  • Wage differential; new economic geography; endogenous growth; knowledge spillovers
  • RePEc:cii:cepiei:2006-4td
Language
  • English
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