Sofia B. S. D. Castro () (Faculdade de Economia and Centro de Matematica, Universidade do Porto) Joao Correia-da-Silva () (CEF.UP and Faculdade de Economia, Universidade do Porto) Pascal Mossay () (School of Economics, Henley Business School, University of Reading and Departamento de Fundamentos del Analisis Economico, Universidad de Alicante.)
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We study a 3-region core-periphery model à la Krugman and compare our results with those of the standard 2-region model. The conditions for the stability of the dispersion and concentration configurations are established. Like in the 2-region model, dispersion and concentration can be simultaneously stable. We show that the 2- region (3-region) model favors the dispersion (concentration) of economic activity. Finally, we extend the core-periphery model to the case of n regions and show that stability of concentration with 2 regions implies stability of concentration with any even number of regions.
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Paper provided by Universidade do Porto, Faculdade de Economia do Porto in its series FEP Working Papers with number
325.
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