In a later paper, Krugman & Lizas-Elizondo (1996) replace the market demand from immobile,
dispersed farmers by land rent as the source of centrifugal force. They show that in this case, increased
trade can lead to dispersion of economic activity. The intuition is that as a new market arises from
trade, the pull of the existent domestic market diminishes. The domestic center loses the consumers
who can now consume from abroad. They apply this model to Mexico, and show that Mexico City has
lost relevance as a determinant of regional economic growth over time. Further, Krugman & LizasElizondo
predict that the removal of trade barriers will primarily benefit for those regions close to the
new market, in our case, those regions closer to the U.S. border.