The core periphery model with asymmetric inter-regional and intra-regional trade costs

• Type: Article in International Scientific Journal
• Date: 2009

Authors

Vasco Leite (Author) FEP; Sofia B.S.D. Castro (Author) FEP; João Correia-da-Silva (Author) FEP

Journal

Title: Portuguese Economic Journal

Vol. 8 No. 1

Pages: 37-44

ISSN: 1617-982X

Publisher: Springer Nature

Indexing

ISI Web of Knowledge - 4 Citations

ISI Web of Science

Scopus - 3 Citations

Econlit

Scientific classification

FOS: Social sciences > Economics and Business

CORDIS: Social sciences > Economics

Other information

Authenticus ID: P-003-MBH

DOI: 10.1007/s10258-009-0036-x

Abstract (EN): We generalize the model of Krugman (J Polit Econ 99(3):483-499, 1991) to allow for asymmetric trade costs between regions and for (asymmetric) trade costs that are internal to the regions. We find that industrial activity, in a region, is enhanced by higher costs of importing and lower costs of exporting (more precisely, by a higher ratio between the two trade costs). This suggests that countries may impose tariffs on imported goods and seek to remove the import tariffs in other countries (unilateral protectionism) in order to foster industrial activity. Industrial activity is also promoted by lower domestic internal trade costs and higher foreign internal trade costs (more precisely, by a lower ratio between the two trade costs).

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 8