Trade Policy and the Third World Metropolis / Raul Livas Elizondo, Paul Krugman.

Format:

Book

Author/Creator:

Elizondo, Raul Livas.

Contributor:

National Bureau of Economic Research.

Krugman, Paul.

Series:

Working Paper Series (National Bureau of Economic Research) no. w4238.

NBER working paper series no. w4238

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1992.

Summary:

Many of the world's largest cities are now in developing countries. We develop a simple theoretical model, inspired by the case of Mexico, that explains the existence of such giant cities as a consequence of the strong forward and backward linkages that arise when manufacturing tries to serve a small domestic market. The model implies that these linkages are much weaker when the economy is open to international trade -- in other words, the giant Third World metropolis is an unintended by-product of import-substitution policies, and will tend to shrink as developing countries liberalize.

Notes:

Print version record

December 1992.