Jacques-Francois Thisse

Jacques-Francois Thisse
Université Catholique de Louvain - UCLouvain | UCLouvain · Center for Operations Research and Econometrics

Doctor of Philosophy

About

439
Publications
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Publications

Publications (439)
Article
Full-text available
We study how the supply of environmentalism, which is defined by psychic benefits (costs) associated with the purchase of high-environmental (low-environmental) qualities, affects the way firms choose their prices and products and the ensuing consequences for the global level of pollution. Contrary to general belief, a high supply of environmentali...
Article
We investigate whether localities gain or lose employment when there are connected to a transportation network, such as a high-speed railway line. We argue that long-haul economies—implying that the marginal transportation cost decreases with network distance—play a pivotal role in understanding the location choices of firms. We develop a new spati...
Chapter
Location matters. The most striking example is the highly uneven distribution of population and wealth across space. For example, cities occupy approximately 2 percent of the Earth’s land surface, but host more than half of the world’s population and produce about 80 percent of its economic output. The twenty most populous US metropolitan statistic...
Article
This paper explores the conditions for the emergence of a system of cities in a general equilibrium setting that accounts for the mobility of labor, transportation costs between cities and commuting costs within cities. Locations are equally distributed over a circular space. We find that the multiplicity of stable spatial equilibria is the rule an...
Article
Spatial economics aims to explain why there are peaks and troughs in the spatial distribution of wealth and people, from the international and regional to the urban and local. The main task is to identify the microeconomic underpinnings of centripetal forces, which lead to the concentration of economic activities, and centrifugal forces, which brin...
Article
We consider an economic geography setting in which firms are free to choose one of the following organizational types: (i) integrated firms, which perform all their activities at the same location, (ii) horizontal firms, which operate several plants producing the same good at different locations, and (iii) vertical firms, which perform distinct act...
Article
We provide a bare–bones framework that uncovers the circumstances which lead either to the emergence of equally-spaced and equally-sized central places or to a hierarchy of central places. We show how these patterns reflect the preferences of agents and the efficiency of transportation and communication technologies. With one population of homogene...
Article
The misallocation of resources is endemic to imperfect competition. We gener-alize the Spence-Dixit-Stiglitz framework to heterogeneous firms, addressing when the market provides optimal quantities, variety and productivity. This yields sev-eral insights. First, constant elasticity of substitution demand ensures market allo-cations are efficient, d...
Chapter
The paper carries out the detailed comparison of two types of imperfect competition in a general equilibrium model. The price-taking Bertrand competition assumes the myopic income-taking behavior of firms, another type of behavior, price competition under a Ford effect, implies that the firms’ strategic choice takes into account their impact to con...
Article
This special issue is based on a seminar held at the Institute of Developing Economies, Japan External Trade Organization (IDE‐JETRO) in 2017, focusing on human capital. In a panel discussion at the seminar, the audience and speakers posed questions and offered comments. Below are the interactions summarized according to three major topics covered...
Article
Full-text available
Large and productive metropolitan areas play a growing role in the working of developed and emerging economies alike. This paper surveys the recent contributions of urban economics, highlighting the role of external increasing returns—called agglomeration economies in the context of a city, which are key in the development and functioning of large,...
Article
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We study how technological progress in manufacturing and migration costs interact to shape the space-economy. Rising labor productivity in the manufacturing sector fosters the agglomeration of activities, whereas falling transport costs associated with technological and organizational innovations fosters their dispersion. Since these two forces hav...
Article
This paper compares the market equilibria in a differentiated industry under Cournot, Bertrand, and monopolistic competition. This is accomplished in a one-sector economy where consumers are endowed with separable preferences. When firms are free to enter the market, monopolistically competitive firms charge lower prices than oligopolistic firms, w...
Article
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We propose a general model of monopolistic competition, which encompasses existing models while being flexible enough to take into account new demand and competition features. Even though preferences need not be additive and/or homothetic, the market outcome is still driven by the sole variable elasticity of substitution. We impose elementary condi...
Article
This paper discusses the reasons for the spatial impossibility theorem, which states that the competitive paradigm cannot explain the formation of large urban agglomerations and trade ows. This result is especially meaningful insofar as it is internal to the theory itself. We then briey explores dierent solutions to remedy to this methodological fa...
Article
Full-text available
We study how administrative boundaries and tax competition among asymmetric jurisdictions interact with the labor and land markets to determine the economic structure and performance of metropolitan areas. Contrary to general belief, political fragmentation and cross-border commuting need not be welfare-decreasing. Tax competition implies that the...
Article
Full-text available
Cities are the cradle of a wide range of cultural, social, and technological innovations that are at the heart of modern economic growth and development. Half of humanity today lives in cities but, until the last two decades, economists have paid much less attention to cities than have other social scientists. By contrast, geographers have long stu...
Article
We study how the level of trade costs and the intensity of competition interact to explain the nature and intensity of trade within a given industry and the location of firms across countries. As trade costs decrease from very high to very low values, the global economy moves from autarky to two-way trade, through one-way trade from the larger to t...
Chapter
Full-text available
This chapter does not aim to survey what has been accomplished in new economic geography (NEG) since the publication of Paul Krugman’s seminal paper. Rather, we provide an overview of recent developments in the NEG literature that build on the idea that the difference in the economic performance of regions is explained by the behavior and interacti...
Article
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Many trade models of monopolistic competition identify cost efficiency as the main determinant of firm performance in export markets. To date, the analysis of demand factors has received much less attention. We propose a new model where consumer preferences are asymmetric across varieties and heterogeneous across countries. The model generates new...
Article
Full-text available
We develop a model of monopolistic competition that accounts for consumers’ heterogeneity in both incomes and preferences. This model makes it possible to study the implications of income redistribution on the toughness of competition. We show how the market outcome depends on the joint distribution of consumers’ tastes and incomes and obtain a clo...
Article
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We combine spatial and monopolistic competition to study market interactions between downtown retailers and an outlying shopping mall. Consumers shop at either one marketplace or at both, and buy each variety in volume. The market solution stems from the interplay between the market expansion effect generated by consumers seeking more opportunities...
Article
We study how political boundaries and fiscal competition interact with the labor and land markets to determine the economic structure and performance of metropolitan areas. Contrary to general belief, institutional fragmentation need not be welfare-decreasing, and commuting from the suburbs to the central city is not wasteful. Thus, the institution...
Article
New economic geography (NEG) has proven to be very useful in dealing with a large number of issues. Yet, in this paper we do not discuss the canonical NEG models and their vast number of extensions. Rather, we provide an overview of recent developments in the NEG literature that build on the idea that the difference in the economic performance of r...
Book
Dans le rapport en ligne la pagination de ce chapitre va de la page 365 à 380
Article
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We propose a model of monopolistic competition with additive preferences and variable marginal costs. Using the concept of "relative love for variety," we provide a full characterization of the free-entry equilibrium. When the relative love for variety increases with individual consumption, the market generates pro-competitive effects. When it decr...
Article
Full-text available
Behind the mystery of economic growth stands another mystery: Why do some places fare better than others? Casual evidence shows that sizable differences exist at very different spatial scales (countries, regions and cities). This book aims to discuss the main economic reasons for the existence of peaks and troughs in the spatial distribution of wea...
Article
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We study urbanization and rural industrialization in a setting involving one urban region (UU) and one rural region (RR). Farmers are heterogeneous in their attitude toward migration, while firms' efficiency is higher in UU than in RR because agglomeration economies have been built in UU. Farmers face three options: (i) working in the agricultural...
Article
The pattern of trade observed from firm-product-country data calls for a new generation of models. To address the unexplained variation in the data, we propose a new model of monopolistic competition where varieties enter preferences non-symmetrically, capturing both horizontal and vertical differentiation in an unprecedented way. Together with a v...
Article
Full-text available
There is a wide consensus among international institutions and national governments in favor of compact (i.e. densely populated) cities as a way to improve the ecological performance of the transport system. Indeed, when both the intercity and intra-urban distributions of activities are given, a higher population density makes cities more environme...
Article
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Ce rapport sur les interdépendances économiques et sociales entre la Wallonie et Bruxelles s’inscrit dans cette volonté de faire progresser l’entrepreneuriat dans notre région. Bruxelles est une métropole dont l’hinterland se situe spatialement en grande partie en Wallonie. Pour continuer à se développer, les deux composantes ont besoin l’une de l’...
Article
Depuis les travaux de Paul Krugman, l’analyse economique spatiale a retrouve une visibilite parmi les economistes universitaires, visibilite qu’elle avait perdue depuis le renouveau de l’economie urbaine dans les annees 1970. Un des grands merites de la nouvelle economie geographique est d’expliquer l’emergence de disparites regionales en mobilisan...
Article
Full-text available
The chapter surveys the main contributions of new economic geography from the point of view of transport analysis. It shows that decreasing transport costs is likely to exacerbate regional disparities. However, very low transport costs should foster a more balanced distribution for economic activities across space. Thus, the spatial curve of develo...
Article
The recent availability of trade data at a firm-product-country level calls for a new generation of models able to exploit the large variability detected across observations. By developing a model of monopolistic competition in which varieties enter preferences non-symmetrically, we show how consumer taste heterogeneity interacts with quality and c...
Article
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This paper provides a bird-eye overview of the history of spatial economic theory. It is organized around three main ideas (and authors): (i) land use and urban economics (Thünen), (ii) the nature of competition across space (Hotelling), and (iii) new economic geography and the emergence of economic agglomerations (Krugman). JEL classification: B10...
Article
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Our aim is to explain how a small country can be viable as an international banking center (IBC). We build a model in which mobile investors choose between two banking centers located respectively in a small country and in a large country. These countries compete in two instruments, taxation and institutional infrastructure. It follows that an IBC...
Article
This paper studies the evolution and determinants of spatial inequalities in France. To this end, we use a unique database providing data on value-added, employment, and population over the entire set of French “Départements” in 1860, 1896, 1930, 1982, and 2000. These data cover three sectors: Agriculture, Manufacturing, and Services. Firstly, we c...
Article
One of the most striking feature of the space-economy is that cities form a hierarchical system exhibiting some regularity in terms of their size and the array of goods they supply. In order to show how such a hierarchical system may emerge, we consider a model with monopolistically competitive markets for the industrial sectors. As transport costs...
Article
This paper investigates the impact of progressive trade openness on the formation of entrepreneurship in a two-country occupation choice model with monopolistic competition. We show that trade opening gives rise to a non-monotonic process of international specialization, in which the share of entrepreneurial firms in the large (small) country first...
Article
Full-text available
We consider a differentiated market involving a handful of oligopolistic firms and a wide range of monopolistically competitive firms. Under various specifications of preferences, we show that the presence of small non-strategic firms is sufficient for the strategic interactions among oligopolistic firms to be diluted when the monopolistically comp...
Article
Full-text available
We propose a general model of monopolistic competition and derive a complete characterization of the market equilibrium using the concept of Relative Love for Variety. When the RLV increases with individual consumption, the market generates pro-competitive effects. When it decreases, the market mimics anti-competitive behavior. The CES is a borderl...
Article
Economic activities are not concentrated on the head of a pin, nor are they spread evenly over a featureless plane. On the contrary, they are distributed very unequally across locations, regions, and countries. Even though economic activities are, to some extent, spatially concentrated because of natural features, economic mechanisms that rely on t...
Article
Full-text available
We study how the level of trade costs and the intensity of competition can explain the existence of two-way, one-way or no trade within the same industry. As trade costs decrease from very high to very low values, the economy moves from autarky to a regime of two-way trade, through a regime of one-way trade from the larger to the smaller country. T...
Article
Geographical space is a major concept in spatial analysis. Curiously enough, no attempt has so far been made to provide a general and rigorous presentation. In this paper, a formal definition of the basic geographical components is given. For that purpose, topology and measure theory are used. A general definition of geographical space is then prop...
Article
Full-text available
We propose a general model of monopolistic competition and derive a complete characterization of the market equilibrium based on an Arrow-Pratt measure of concavity of the utility, interpreted as the relative love for variety. When the relative love for variety increases with the consumption level, the market displays standard competitive effects....
Article
In this paper, I pursue two objectives. First, I propose a primer in economic geography relying on a simple model that can be solved analytically by undergraduate students. Second, I briefly discuss two topics that, in my opinion, should rank high on the research agenda. Copyright (c) 2010, Wiley Periodicals, Inc.
Article
.There is a large consensus among international institutions and national governments to favor urban-containment policies –the compact city– as a way to improve the ecological performance of the urban system. This approach overlooks a fundamental fact: what matters for the ecological outcome of cities is the mix between the level of population dens...
Article
Full-text available
Bruxelles est-elle un poids pour les deux autres régions, comme on l’entend dire dans certains milieux ? Ou, au contraire, constitue-t-elle un atout pour l’ensemble du pays ?
Article
Full-text available
In this paper we study how the trade costs and the intensity of competition can explain the existence of bilateral trade, unilateral trade and no trade within an industry. We show as trade costs decrease from very high to very low values, the global economy moves from autarky to a regime of bilateral trade, through a regime of unilateral trade from...
Article
Full-text available
Recent empirical contributions in labor economics suggest that individual firms face upward sloping labor supplies. We rationalize this by assuming that idiosyncratic non-pecuniary conditions interact with money wages in workers’ decisions to work for specific firms. Likewise, firms supply differentiated goods in response to differences in consumer...
Article
ABSTRACT We investigate whether an aging population may challenge the supremacy of large working cities. To this end, we develop an economic geography model with two types of individuals (workers and retirees) and two sectors (local services and manufacturing). Workers produce and consume; the elderly consume only. As a result, the mobility decisio...
Article
Full-text available
Armchair evidence shows that many industries are made of a few big commercial or manufacturing firms, which are able to affect the market outcome, and of a myriad of small family-run businesses with very few employees, each of which has a negligible impact on the market. Examples can be found in apparel, catering, publishers and bookstores, retaili...
Article
We extend the model by Behrens et al. [Behrens, K., Hamilton, J.H., Ottaviano, G.I.P., Thisse, J.-F., 2007a. Commodity tax harmonization and the location of industry. Journal of International Economics 72, 271–291.] to the case of non-cooperative commodity taxation and investigate the impacts of tax harmonization and changes in tax principle on equ...
Article
Full-text available
Paul Krugman has clarified the microeconomic underpinnings of both spatial economic agglomerations and regional imbalances at national and international levels. He has achieved this with a series of remarkably original papers and books that succeed in combining imperfect competition, increasing returns, and transportation costs in new and powerful...
Article
Although transport costs are a key-ingredient of New Economic Geography, the transport sector is usually abstracted away from the analysis. Put differently, freight rates are taken as parametric and are not set by the market. This paper studies the relationships between transport costs, industry location, and welfare when freight rates are set by p...
Article
This paper investigates the impacts of progressive trade openness, technological externalities, and heterogeneity of individuals on the formation of entrepreneurship in a two-country occupation choice model. We show that trade opening gives rise to a non-monotonic process of international specialization, in which the share of entrepreneurial firms...
Article
Cet article propose des recommandations qui apparaissent comme etant prioritaires pour le developpement economique de la Wallonie et de Bruxelles. Il met l’accent sur des strategies souhaitables, quel que soit le scenario institutionnel retenu pour l’avenir du pays.Il commence par brievement enumerer les problemes specifiques de ces regions : (i) f...
Article
By its very nature, transport is linked to trade. Trade being one of the oldest human activities, the transport of commodities is, therefore, a fundamental ingredient of any society. People get involved in trade because they want to consume goods that are not produced within reach. The Silk Road provides evidence that shipping high-valued goods ove...
Article
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We show that heterogeneous firms choose different locations in response to market integration. Specifically, decreasing trade costs lead to the gradual agglomeration of efficient firms in the larger country where they have access to a bigger pool of consumers. In contrast, high-cost firms seek protection against competition from efficient firms by...
Article
Economic Geography" is the most complete, up-to-date textbook available on the important new field of spatial economics. This book fills a gap by providing advanced undergraduate and graduate students with the latest research and methodologies in an accessible and comprehensive way. It is an indispensable reference for researchers in economic geogr...
Article
Full-text available
We study the effects of a decrease in inter-city transport costs on the spatial distribution of population in a multi-regional economy, when a rise in the regional population generates higher urban costs. Holding the number of cities constant, as transport costs are reduced gradually from a very high level to a very low level, there is a first phas...
Article
Full-text available
The paper surveys the main contributions of new economic geography from the point of view of transport analysis. It shows that decreasing transport costs is likely to exacerbate regional disparities. However, very low transport costs should foster a more balanced distribution for economic activities across space. Thus, the spatial curve of developm...
Article
This article investigates agglomeration processes in ageing societies by introducing an overlapping generation structure into a New Economic Geography model. Whether higher economic integration leads to spatial concentration of economic activity crucially hinges on the economies' demographic properties. While population aging as represented by decl...
Chapter
Location theory deals with what is where. ‘What’ refers to any possible type of economic activity involving stores, dwellings, plants, offices, or public facilities. ‘Where’ refers to areas such as regions, cities, political jurisdictions, or custom unions. The objective of location theory is to explain why particular economic activities choose to...
Article
Full-text available
Our purpose is to investigate how the interplay between trade, commuting and communication costs shapes the economy at both the interregional and intra-urban levels. Specifically, we study how economic integration affects the internal structure of cities and show how decentralizing the production and consumption of goods in secondary employment cen...
Article
Full-text available
This paper investigates the impacts of progressive trade openness, technological externalities, and heterogeneity of individuals on the formation of entrepreneurship in a two-country occupation choice model. We show that trade opening gives rise to a non-monotonic process of international specialization, in which the share of entrepreneurial firms...
Article
We show that the concepts and tools developed in new economic geography may be used to revisit several problems in regional economics. In particular, we want to stress the following two points: (i) what do we mean by a region and (ii) what kind of interactions between regions do we want to study and how to model them? We conclude by discussing a fe...
Article
We study the impact of falling international trade costs and falling national transport costs on the economic geography of countries involved in an integration process. Each country is formed by two regions between which labor is mobile, whereas there is no international mobility. Goods can be traded both nationally and internationally at positive,...
Article
We study the positive implications of commodity taxation and tax harmonization under the destination and origin principles when firms are monopolistic competitors facing variable demand elasticity and segmented markets. Our emphasis is on the international location of firms in the presence of market size asymmetries and trade costs. Under the desti...
Article
This paper investigates the impacts of capital mobility and tax competition in a setting with imperfect matching between firms and workers. The small country attracts less firms than the large one but accommodates a share of the industry that exceeds its capital share—a reverse home market effect. This allows the small country to be more aggressive...
Article
Full-text available
The aim of this paper is to qualify the claim that regulating a competitive transport sector is always detrimental to consumers. We show indeed that, although transport deregulation is beneficial to consumers as long as the location of economic activity is fixed, this is no longer true when, in the long run, firms and workers are freely mobile. The...
Article
We study a market involving both oligopolistic, whose behavior is strategic, and monopolistically competitive firms, each being negligi-ble to the market. In such a mixed setting, the size of the monopolis-tically competitive subsector decreases as the number of oligopolistic firms rises. Furthermore, the level of social welfare increases as the nu...
Article
We investigate how cross-country differences in firms' fixed set-up costs affect the trade-off between global efficiency and spatial equity. Our analysis reveals that the standard assumption of symmetry in set-up costs masks the existence of an interesting effect: the range of available varieties depends on the spatial distribution of firms. In suc...
Article
We consider an economic geography model of a new genre: All firms and workers are mobile and their agglomeration within a city generates costs through competition on a housing market. In the case of two sectors, contrasted patterns arise. When one good is perfectly mobile, the corresponding industry is partially dispersed whereas the other is agglo...
Article
We present a two-country four-region model of new economic geography that partly endogenizes the level of trade costs. Contrary to the existing literature, we assume that international unit shipping costs depend on the volume of trade, due to the presence of density (dis)economies. We show that agglomeration (or dispersion) within a country may be...