ABSTRACT: This paper introduces a trade cost asymmetry into the Core-periphery model to

investigate the location effects of protection. Trade costs arise from the active choice of

governments. In the case of a country that can decide the level of barriers to imports without

retaliation by the other country, unilateral protection is shown to attract firms and to increase the

welfare of residents. Since all countries face a rational incentive to unilateral protection, noncooperative

A Geographic Approach to International Economics.pdf
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