Scandinavian Working Papers in Economics

Research Papers in Economics,
Stockholm University, Department of Economics

No 2003:7: Regional Policy, Integration and the Location of Industry

Rikard Forslid ()
Additional contact information
Rikard Forslid: Dept. of Economics, Stockholm University, Postal: Department of Economics, Stockholm University, S-106 91 Stockholm, Sweden

Abstract: Many countries devote a large part of their national budget to regional policy. This paper analyses the interaction of economic integration and some typical regional policies in a new economic geography model with three regions of different size. The policies analysed are the relocation of government activities, infrastructure investment and subsidies to the establishment of industry. It is shown how regional policy can easily be misdirected.

Keywords: agglomeration; economic geography; regional policy

JEL-codes: F12; F15; F21; R12

17 pages, June 1, 2003

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