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Self-Defeating Regional Concentration

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  • Kiminori Matsuyama
  • Takaaki Takahashi

Abstract

We present a simple model fo a two-region economy in which undesirable concentration may occur. With reedom to choose where to lifve, individuals in this economy concentrate into one region in their pursuit of better life, and end up becoming worse off. We characterize the conditions under which such self-defeating concentration occurs in terms of a few key parameters, such as economies of scale in nontradeable service sectors, regional differences in labor productivity in tradeable goods sectors, and substitutabilty of tradeable goods in consumption.

Suggested Citation

  • Kiminori Matsuyama & Takaaki Takahashi, 1993. "Self-Defeating Regional Concentration," Discussion Papers 1050, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    • Handle: RePEc:nwu:cmsems:1050
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    More about this item

    Keywords

    Labor Migration; Stability of Population Distribution; Undesirable Regional Concentration; Essentialty in Consumption.;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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