Applying a newly developed CGE-model, we present scenarios for the future economic geography of Europe. The model divides the world into ten regions, of which five are European, and there are 14 industries, of which 12 are imperfectly competitive. With a complete input-output structure, the model captures comparative advantage mechanisms as well as intra-industry trade and "new economic geography" agglomeration forces. The simulations focus on successful transformation in Eastern Europe, and on further European or global integration. The results indicate that both transformation and European integration are of great importance for Eastern Europe, while the effects for other European regions are moderate.
We test for the existence of endogenous agglomeration forces, using structural econometric models. After showing generally how to establish the existence of agglomeration forces empirically, we undertake an industry study of the maritime industry in Norway. The results suggest that there are signi®cant economies of scale in the maritime industry. These economies of scale are mainly found in sub-groups of a set of nine maritime industries. This indicates that the maritime industry consists of two self-reinforcing agglomerations, but that there are few mechanisms actually keeping the two together. two anonymous referees for valuable comments and suggestions, which have improved the paper. Thanks also to Anne Liv Scrase for editorial assistance, to Kathrine Rùnsen and Eline Paxal for providing excellent research assistance, and to Arne Osmundsvaag for providing data. This research has been ®nanced by the Research Council of Norway.Ã signi®cance level 97.5%, ÃÃ signi®cance level 95%, ÃÃÃ signi®cance level 90%. {indicates increasing returns to scale (ã . 1) at a 97.5% signi®cance level. The complete model also includes industry speci®c trends and technological development variables, ç trend , ç GNP , ç ÄGNP . Results can be obtained on request.
Self-reinforcing agglomerations? An empirical industry study 525# The editors of the Scandinavian Journal of Economics 1999.Ã signi®cance level 97.5%, ÃÃ signi®cance level 95%, ÃÃÃ signi®cance level 90%. {{indicates increasing returns to scale (ã .1) at a 95% signi®cance level. The complete model also includes industry speci®c trends and technological development variables, ç trend , ç GNP , ç ÄGNP . Results can be obtained on request.
This paper focuses on the location effects of preferential trade areas (PTA) on non-members. More specifically, using a CGE model calibrated to real data, it focuses on the impact of tighter European integration on outsider regions. We argue that because theoretical models analysing PTAs have very few contact points with reality, further research is needed to evaluate whether the effects highlighted by these models -catastrophic agglomeration and non-monotonic relocation, for example -are theoretical aberrations of highly specific models, or important effects that help us explain real world events. In our 14-sector, 10-region model, we find broad confirmation for the theoretical PTA models, and in particular for the Puga-Venables effects. We find that tighter European integration has a significant impact on Central and Eastern European countries, but the impact on the other regions of the world is rather small. Our findings do however, suggest that the simple models of economic geography analysing PTAs miss important elements. The most important of these are comparative advantage and real trade costs. JEL Classification codes: ___, C68, F10, F12, F15, R12
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