Agglomeration and Trade Revisited*

Abstract

The purpose of this paper is twofold. First, we present an alternative model of agglomeration and trade that displays the main features of the recent economic geography literature while allowing for the derivation of analytical results by means of simple algebra. Second, we show how this framework can be used to adopt a forward-looking approach to the dynamics of migration in the process of agglomeration instead of the myopic Marshallian model used so far in this literature.