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The Geography of Development

Author(s): Desmet, Klaus; Nagy, David Krisztian; Rossi-Hansberg, Esteban A.

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Abstract: © 2018, by The University of Chicago. All rights reserved. We develop a dynamic spatial growth theory with realistic geography. We characterize the model and its balanced-growth path and propose a methodology to analyze equilibria with different levels of migration frictions. Different migration scenarios change local market size, innovation incentives, and the evolution of technology. We bring the model to the data for the whole world economy at a 1° × 1° geographic resolution. We then use the model to quantify the gains from relaxing migration restrictions. Our results indicate that fully liberalizing migration would increase welfare about threefold and would significantly affect the evolution of particular regions of the world.
Publication Date: 1-Jun-2018
Citation: Desmet, K, Nagy, DK, Rossi-Hansberg, E. (2018). The Geography of Development. Journal of Political Economy, 10.1086/697084
DOI: doi:10.1086/697084
ISSN: 0022-3808
EISSN: 1537-534X
Pages: 1 - 81
Type of Material: Journal Article
Journal/Proceeding Title: Journal of Political Economy
Version: Final published version. Article is made available in OAR by the publisher's permission or policy.

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