The Economics of Isolation and Distance

Abstract

This paper explores the economic implications of isolation and remoteness. Evidence on the impact of distance on trade costs and trade flows is reviewed, and the effects of remoteness on real incomes are investigated. Empirical work confirms the predictions of theory, that distance from markets and sources of supply can have a significant negative impact on per capita income. The possible implications of new technologies for these spatial inequalities are discussed.Economic isolation, market access, trade costs.