Migration

One may be tempted to anticipate extra trade within the agglomeration equilibria than in the symmetric equilibrium. In the symmetric equilibrium with zero migrant shares, the quantity of intra-industry commerce reaches its maximum level, whereas the volume of inter-industry commerce is zero. Hence, without additional knowledge about structural options of the economies concerned, we must conclude ambiguity when taking a glance at total trade. France’s autarky production and consumption factors are decided where the combination indifference curve touches France’s PPF at point A∗.

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