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Handling Market Imperfections in a Spatial Economy: Some Experimental Results II

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  • Eduardo A. Haddad

    ()

  • Geoffrey J. D. Hewings

    ()

Abstract

The Brazilian economy, with significant differencesin the distribution of economic activity acrossregions, presents a challenge to models that adopt aperfectly competitive market structure. This paperemploys an interregional CGE model of the Brazilianeconomy to explore the long-run impacts ofpositing changes in transportation structure andscale economies on regional and national welfare.In particular, the transportation cost structure ismodeled explicitly as a margin rather than in an icebergform; scale economies are addressed as a wayto mimic the imperfectly competitive structure ofthe Brazilian economy and to capture some of thepotential impacts of core-periphery relationshipsin production structure. This paper complementsa previous study by Haddad and Hewings (2005)that focused on the short-run implications of similarexperiments.

Suggested Citation

  • Eduardo A. Haddad & Geoffrey J. D. Hewings, 2009. "Handling Market Imperfections in a Spatial Economy: Some Experimental Results II," ENSAYOS SOBRE POLÍTICA ECONÓMICA, BANCO DE LA REPÚBLICA - ESPE, vol. 27(58), pages 140-193, August.
  • Handle: RePEc:col:000107:005846
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    Cited by:

    1. Arguello, Ricardo, 2009. "The Regional Impact of Discriminatory Trade Liberalization on Colombian Agriculture," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 39(2).

    More about this item

    Keywords

    interregional CGE model; transportationstructure; scale economies.;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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