Ubiquitous inequality: The home market effect in a multicountry space
نویسندگان
چکیده
We show that spatial inequalities in an economic space of multiple countries in terms of both nominal income and real income are ubiquitous in the sense that they appear when countries are differentiated by population only. A new trade theory model is constructed without any freely traded homogeneous good, so that we can examine the home market effect (HME) and the non-monotonic relation between income inequalities and globalization. Meanwhile, there are three HME definitions for a two-country space in terms of firm share, labor wage, and trade pattern. The first two remain applicable in a multicountry space, and they are shown to be equivalent. However, a natural extension of the third is not equivalent. © 2013 Elsevier B.V. All rights reserved.
منابع مشابه
The Home Market Effect in a Multicountry Space
The concept of home market effect (HME) refers to the phenomenon that firms agglomerate more than the market share in a large country. Krugman (1980) set up two models, showing that firms agglomerate more than the market share and that the wage is higher in the larger country. In Takahashi et al (2010), the equivalence between a larger firm share and a higher wage is proved. All of them are bas...
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