DP1813 A geometry of Specialization

Author(s):	Joseph Francois, Doug R Nelson
Publication Date:	March 1998
Keyword(s):	Agglomeration, location of industry, Specialization, trade and development
JEL(s):	F12, O12, O41
Programme Areas:	International Trade and Regional Economics
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=1813

Division of labour models have become a standard analytical tool, along with competitive general equilibrium models (Ricardian, HOS, Ricardo-Viner), in public finance, trade, growth, development and macroeconomics. Yet unlike the earlier models, specialization models lack a canonical representation. This is because they are both new and complex, characterized by multiple equilibria, instability and emergent structural properties under parameter transformation. We develop a general framework for such models, illustrating results from current research on specialization models, and explaining why one sub-class of these models is particularly difficult to illustrate easily.