Contents
Abstract 1420
Keywords 1420
0. Introduction 1421
1. Theintegratedeconomy 1426
1.1. Aworkhorsemodel 1426
1.2. Diminishing returns, market size and economic growth 1430
1.3.
The effects of economic integration 14362. Specialization, trade and diminishing returns 1442
2.1. Economic growth in autarky 1444
2.2. Factorpriceequalization 1446
2.3. Formalaspectsofthemodel 1454
2.4. Limits to structural transformation (I): factor proportions 1456
2.5. Limits to structural transformation (II): industry productivities 1464
3. Transportcostsandmarketsize 1472
3.1. Nontradedgoodsandthecostofliving 1473
3.2. Agglomerationeffects 1481
3.3. Theroleoflocalmarkets 1487
4. Final remarks 1490
Acknowledgements 1492
References 1492
Handbook of Economic Growth, Volume 1B. Edited by Philippe Aghion and StevenN. Durlauf © 2005 Elsevier B.V All rights reserved
DOI: 10.1016∕S1574-0684(05)01022-1
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