Aging nations and the future of cities

We investigate whether an aging population may challenge the supremacy of large working-cities. To this end, we develop an economic geography model with two types of individuals (the elderly and workers) and two sectors (consumer services and manufacturing). Individuals are geographically mobile and their agglomeration within a city generates rising urban costs through competition for land. When the elderly are immobile and equally distributed between cities, an aging population works against the agglomeration of production. When the elderly are free to choose their residence, the most likely scenario is such that the city with the lower share of old people follows a U-shaped curve. Increasing commuting costs cut short the first phase in which the employment share decreaseseconomic geography, aging population, spatial mobility, sectoral mobility, commuting costs

Technical change and agglomeration

Although economic historians consider technical change to be a significant factor explaining the evolution of the spatial organization of an economy, economic geography still fails to address this important issue. By developing a simple two-region general equilibrium model under monopolistic competition, we show that agglomeration is triggered by technological progress shifting production towards more skill intensive techniques.Skill-biased change economic geography

Attitudes towards foreign products and welfare with capital mobility

We develop a model of trade with imperfect competition to study the welfare implications in developing and developed countries of the asymmetry in attitudes towards foreign products. In the developed country, consumers benefit from a better perception of foreign products while the rental rate of capital declines as long as the location of capital remains unchanged. However, when capital is mobile, the developing country hosts more and more capital at the expense of the developed country as perception of varieties produced in the developed country improves and the surplus of consumers in the developed country can decrease.product of origin, capital location, consumer’s surplus

Unemployment duration, city size, and the tightness of the labor market

This paper attempts to determine whether residential location affects unemployment duration. Our analysis is based on a spatial job search framework that shows the importance of dissociating the role of travel time from physical distance in unemployment duration. The contribution of our study also stems from the development of skill-specific accessibility measures that take into account the spatial distribution of labor supply and demand. Our results show that physical distance and competition among searchers must be controlled for in order to understand the significant role of job access (measured in terms of travel time) in unemployment duration. Second, improvements in access raise the probability that persons living in urban fringes and rural areas will become employed. Third, for workers living in large urban centers, the relationship between location and unemployment duration is insignificant.unemployment duration, job accessibility, commuting time

The International Strategy of Firms: the Role of Endogenous Product Differentiation

We study the impact of trade liberalization on the international strategy of firms (to export and/or invest abroad as well as the number of products to be produced and exported) when product differentiation is endogenous. By considering product differentiation as a strategic variable, our analysis sheds new light on the impact of trade barriers on the decision to produce abroad and on the choice of product range, in accordance with recent empirical evidence. Indeed, we show that, even though technology exhibits the same productivity for each variety, firms drop some varieties with trade integration. In addition, our results reveal that, contrary to the standard theoretical literature, the relationship between the decision to export and trade costs is non-linear. When trade costs are relatively high, each firm export and is multi-product. Then, when trade costs take intermediate values, firms may invest abroad and the choice of producing abroad results from a prisoner's dilemma game. Finally, when trade costs are low, firms export but become single-product.Foreign direct investment, exports, multi-product competition, endogenous differentiation product, trade integration

How labor market rigidities shape business taxation in a global economy?

We investigate the impact of trade liberalization upon the taxation of capital within a context of labor market rigidities. Using a model of trade and location, we show that labor market imperfections not only strengthen tax competition but also affect the relationship between trade integration and tax policies. Capital taxation follows a J-shaped relationship with trade costs when labor markets are flexible, whereas it may increase with falling trade costs in the presence of trade unions acting as Stackelberg leaders or playing simultaneously with governments. In addition, we analyze the outcome which arises from di§erences between the various countries' labor market institutions. Trade liberalization reduces the international differences in wage and capital taxation, making the unionized country more attractive.Tax competition; unions; capital mobility; trade integration

Developing the "outermost regions" of Europe: some lessons from economic geography

A fait l'objet d'une communication à la conférence : La situation macroéconomique de l'ultrapériphérie européenne, le 15/12/2006 à Bruxelles (BEL)The aim of this report is to critically review, in the light of recent economic geography theory, various strategies often suggested for developing the outermost regions of Europe. In so doing, we point out pitfalls and bring to the foreground various relatively neglected aspects. The key messages are as follows. First, insularity, difficult topography and climate, and exposure to natural disasters are not, in fine, insurmountable obstacles to economic development. Yet, a small internal market and excessive reliance on homogeneous products traded in increasingly integrated world markets most certainly are. Second, alleviating remoteness by simply improving infrastructure may backfire, which is one of the main lessons from economic geography. Improvements and development efforts in infrastructure and communications technologies should, therefore, be combined with policies targeting at enhancing and developing relatively immobile local resources, both physical and human

Trade integration and the destination of subsidies

We build a model of trade and location with two countries which differ with respect to their level of productivity. Public spending has two possible allocations: a direct subsidy to immobile households or a wage subsidy to mobile firms. We show that firms receive a lower net tax subsidy in the high-productivity country than in the low productivity one. Despite this less generous policy, the former country can host a larger share of firms, so that its total spending for firms can be higher than in the low productivity country when trade costs are low enough. The welfare analysis suggest that the second-best optimum requires an increase in the subsidy to households in both countries when the economies are weakly integrated or the productivity gap is low or the share of capital incomes redistributed outside the two economies is high.trade integration, firm location, public expenditure composition

Les espaces ruraux et la politique d'aménagement du territoire

Les espaces ruraux français ont fait l'objet jusqu'ici d'un nombre important de mesures publiques spécifiques de la part de l'Etat. Devant leurs échecs relatifs, les politiques rurales gagneraient à être inscrites dans une politique plus globale de l'aménagement du territoire. De cette proposition découlent deux questions. La première réside dans la nécessité de justifier l'aide aux espaces ruraux à partir de motifs, non seulement d'équité, mais aussi d'intérêt général. La seconde concerne le rôle renouvelé de l'Etat en faveur des zones rurales dansun contexte de décentralisation de ses compétences.

Histoire de la dynamique territoriale de l’industrie. Le rôle de la demande de travail

Cet article analyse l’évolution historique du rôle de la demande de travail dans la dynamique spatiale de l’industrie. Après avoir explicité les liens à l’espace des différentes composantes de la demande de travail, nous proposons une périodisation de l’évolution spatiale de l’industrie. Le début de l’industrie se manifeste par des formes de dispersion à la campagne où les ateliers profitent des avantages de coût et de flexibilité de la main-d’œuvre. Dans une deuxième période, l’industrie crée le regroupement en dehors des villes historiques, comme points de fixation de la main-d’œuvre ; puis elle réintègre la ville, afin de bénéficier des avantages d’un marché du travail dense et diversifié. Au cours de la troisième période, l’industrie s’établit à la périphérie des grandes villes, périphérie de plus en plus lointaine : des banlieues proches aux aires rurales les plus reculées où elle retrouve des formes de travail relativement détachées des marchés urbains.industry, urban, rural, labour, economic history