Work

The Geography of Development

Year: 2018

Type: article

Abstract: 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.

Source: Journal of Political Economy

DOI: 10.1086/697084

Authors: Klaus Desmet, Dávid Krisztián Nagy, Esteban Rossi-Hansberg

Institutions: Southern Methodist University, Centre de Recerca en Economia Internacional, Princeton University

Language: English

Topic: Economic Growth and Productivity

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: green

Funder: University of Chicago