Economic Integration and Centre-Periphery Inequalities: The View from Trade Theory

How does economic integration affect the location of economic activity across space? Does integration lead to convergence of income levels across the integrating regions, or does it tend to pull activity into some regions at the expense of others? The topicality of such questions is evident. Within Europe, integration raises hopes of catch-up by poor regions, and at the same time fears that ‘peripheral’ regions may become marginalised as activity shifts to a European core. In the wider world economy, technical progress and trade liberalisation are combining to reduce the costs of international transactions. How will this affect the location