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Ubiquitous inequality: The home market effect in a multicountry space

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  • Zeng, Dao-Zhi
  • Uchikawa, Tomohiro

Abstract

We show that spatial inequalities in an economic space of multiple countries in terms of both nominal income and real income are ubiquitous in the sense that they appear when countries are differentiated by population only. A new trade theory model is constructed without any freely traded homogeneous good, so that we can examine the home market effect (HME) and the non-monotonic relation between income inequalities and globalization. Meanwhile, there are three HME definitions for a two-country space in terms of firm share, labor wage, and trade pattern. The first two remain applicable in a multicountry space, and they are shown to be equivalent. However, a natural extension of the third is not equivalent.

Suggested Citation

  • Zeng, Dao-Zhi & Uchikawa, Tomohiro, 2014. "Ubiquitous inequality: The home market effect in a multicountry space," Journal of Mathematical Economics, Elsevier, vol. 50(C), pages 225-233.
    • Handle: RePEc:eee:mateco:v:50:y:2014:i:c:p:225-233
    DOI: 10.1016/j.jmateco.2013.11.007
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    3. 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).
    4. 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.
    5. Takatoshi Tabuchi & Jacques†François Thisse & Xiwei Zhu, 2018. "Does Technological Progress Magnify Regional Disparities?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 59(2), pages 647-663, May.
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    7. Kato, Hayato & Okubo, Toshihiro, 2018. "Market size in globalization," Journal of International Economics, Elsevier, vol. 111(C), pages 34-60.
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    9. 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.
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