On the Evolution of a Multi-regional System
AbstractWe study the effects of decrease in trade costs on the spatial distribution of industry in multi-regional economy, when a rise in the regional population of workers generates higher urban costs. We show that high and low trade costs imply the all regions involve positive share of the industrial sector. When urban costs are linear, there exists stable equilibrium for almost all values of trade costs. Furthermore, as trade costs fall, there is path of stable equilibria such that the industry is, first, agglomerated into a decreasing number of regions and, then, dipersed among a growing number of regions. The second phase arises because of the increasing urban costs associated with the process of agglomeration.
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Bibliographic InfoPaper provided by CIRJE, Faculty of Economics, University of Tokyo in its series CIRJE F-Series with number CIRJE-F-93.
Length: 42 pages
Date of creation: Sep 2000
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Other versions of this item:
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2000-10-23 (All new papers)
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