The Geography of Multi-Speed Europe

Philippe Martin (1) , Gianmarco Ottaviano (2)

1 CEPR - Center for Economic Policy Research
2 UNIBO - Alma Mater Studiorum Università di Bologna = University of Bologna

This paper describes the possible impact of multi-speed integration on the location of economic activities in Europe. We present a model where two countries integrate their economies and leave a third temporarily outside because of its lower income. We analyse the effect of different integration sequences on industrial location and convergence during the transition period and in the long term, with and without agglomeration economies. Without agglomeration economies, income differentials at the time of integration are the main determinant of industry location. A long transition period may then be called for to avert concentration in the core countries. On the contrary, with migration the temporary exclusion of the poor country may trigger agglomeration in the rich integrated core.

Mots clés: Agglomeration; Convergence; Location; Multi-Speed Integration

Domaines: Economies et finances

Philippe Martin, Gianmarco Ottaviano. The Geography of Multi-Speed Europe. 1995. ⟨hal-03607869⟩