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This paper studies the relationship between the degree of regional integration and regional differences in production structures and income levels. For high trade costs, industry is spread across regions to meet final consumer demand. For intermediate trade costs, increasing returns interacting with migration and/or
Applying a dual technology model to economic geography, this paper studies the effects of regional integration on the location of labor and industrial activity in a Third World economy. Locational choice is a tradeoff between the benefits of agglomoration due to increasing returns to scale, and the benefits of
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