The Core-Periphery Model: Existence And Uniqueness Of Short-Run Equilibrium
AbstractWe consider the core-periphery model by Krugman (1991). The nature and stability of the possible steady states of the model have been made progressively precise, see Fujita et al. (1999) and Baldwin et al. (2003). In that model as well as in all the new economic geography models that have been derived from it, the short-run (instantaneous) equilibrium is implicitly determined by the current labor distribution across regions. The numerical computations used so far to determine the short-run equilibrium, tend to suggest its existence. In this work, an existence and uniqueness proof of short-run equilibrium is provided.
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Bibliographic InfoPaper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number 2005-37.
Length: 14 pages
Date of creation: Dec 2005
Date of revision:
Publication status: Published by Ivie
core-periphery; economic geography; fixed point F12; R12; R23; C62;
Find related papers by JEL classification:
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
- R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
- C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
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