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Typical bifurcation scenario in a three region identical New Economic Geography model

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  • Commendatore, Pasquale
  • Kubin, Ingrid
  • Sushko, Iryna

Abstract

We study global dynamics of the New Economic Geography model which describes spatial distribution of industrial activity in the long run across three identical regions depending on the balancing of agglomeration and dispersion forces. It is defined by a two-dimensional piecewise smooth map depending on four parameters. Based on the numerical evidence we discuss typical bifurcation scenarios observed in the model: starting from the symmetric fixed point (related to equal distribution of the industrial activity in all the three regions) two different scenarios are realized depending on whether the transportation cost parameter is increased or decreased. Emergence of the Wada basins of coexisting attractors leading to the so-called final state sensitivity is discussed, as well as final bifurcation of the chaotic attractor.

Suggested Citation

  • Commendatore, Pasquale & Kubin, Ingrid & Sushko, Iryna, 2015. "Typical bifurcation scenario in a three region identical New Economic Geography model," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 108(C), pages 63-80.
    • Handle: RePEc:eee:matcom:v:108:y:2015:i:c:p:63-80
    DOI: 10.1016/j.matcom.2014.01.004
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    8. Pasquale Commendatore & Martin Currie & Ingrid Kubin, 2008. "Footloose Entrepreneurs, Taxes and Subsidies," Spatial Economic Analysis, Taylor & Francis Journals, vol. 3(1), pages 115-141.
    9. Currie, Martin & Kubin, Ingrid, 2006. "Chaos in the core-periphery model," Journal of Economic Behavior & Organization, Elsevier, vol. 60(2), pages 252-275, June.
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    1. Commendatore, Pasquale & Kubin, Ingrid & Petraglia, Carmelo & Sushko, Iryna, 2014. "Regional integration, international liberalisation and the dynamics of industrial agglomeration," Journal of Economic Dynamics and Control, Elsevier, vol. 48(C), pages 265-287.
    2. Noemi Schmitt & Jan Tuinstra & Frank Westerhoff, 2018. "Stability and welfare effects of profit taxes within an evolutionary market interaction model," Review of International Economics, Wiley Blackwell, vol. 26(3), pages 691-708, August.
    3. Pasquale Commendatore & Ingrid Kubin & Pascal Mossay & Iryna Sushko, 2015. "Dynamic agglomeration patterns in a 2-country NEG model with 4 regions," Gecomplexity Discussion Paper Series 10, Action IS1104 "The EU in the new complex geography of economic systems: models, tools and policy evaluation", revised Feb 2015.
    4. Gaspar, José M. & Ikeda, Kiyohiro & Onda, Mikihasa, 2021. "Global bifurcation mechanism and local stability of identical and equidistant regions: Application to three regions and more," Regional Science and Urban Economics, Elsevier, vol. 86(C).
    5. Gaspar, José M. & Ikeda, Kiyohiro & Onda, Mikihisa, 2019. "Global bifurcation mechanism and local stability of identical and equidistant regions," MPRA Paper 95013, University Library of Munich, Germany.
    6. Askar, S.S. & Al-khedhairi, A., 2020. "On complex dynamic investigations of a piecewise smooth nonlinear duopoly game," Chaos, Solitons & Fractals, Elsevier, vol. 139(C).
    7. Askar, S.S. & Al-khedhairi, A., 2020. "The dynamics of a business game: A 2D-piecewise smooth nonlinear map," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 537(C).
    8. Schmitt, Noemi & Tuinstra, Jan & Westerhoff, Frank, 2017. "Side effects of nonlinear profit taxes in an evolutionary market entry model: Abrupt changes, coexisting attractors and hysteresis problems," Journal of Economic Behavior & Organization, Elsevier, vol. 135(C), pages 15-38.
    9. José M. Gaspar & Sofia B. S. D. Castro & João Correia-da-Silva, 2018. "Agglomeration patterns in a multi-regional economy without income effects," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 66(4), pages 863-899, December.
    10. Aizawa, Hiroki & Ikeda, Kiyohiro & Osawa, Minoru & José M, Gasper, 2019. "Break and sustain bifurcations of S_N-invariant equidistant economy," MPRA Paper 97654, University Library of Munich, Germany.
    11. José M. Gaspar, 2018. "A prospective review on New Economic Geography," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 61(2), pages 237-272, September.

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