DOES TECHNOLOGICAL PROGRESS MAGNIFY REGIONAL DISPARITIES?

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 foster their dispersion. Since these two forces have been at work for a long time, the final outcome must depend on how drops in the costs of producing and trading goods interact with the various costs borne by migrants. Various extensions show the robustness of these conclusions.