Olga Alonso Villar

Spatial distribution of production and international trade: a note

Abstract In this note I present a monopolistic competition model by which I wish to explain the sizes and locations of cities in a context of urban societies. To do this, I extend Krugman and Livas Elizondos model (Krugman, P., Livas Elizondo, R., 1996. Trade policy and the third world metropolis. J. Dev. Economics 49, 137–150) to deal with the analysis of the spatial distribution of cities within the national landscape, i.e., their relative positions within the country. Hence, I allow two kinds of centrifugal forces, one global and another local. The global one is represented by the existence of two adjacent foreign countries. The population size of these countries will affect the location and size of cities in our country of interest. The local centrifugal force is due to the existence of commuting cost/land rent.