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Computation of spatial equilibria in the Ottaviano–Tabuchi–Thisse model

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  • Ma, Wei
  • Naraidoo, Ruthira
  • Perugini, Francesco

Abstract

This paper extends the model of Ottaviano et al. (2002) to a multiple-region economy and provides a constructive proof for the existence of its spatial equilibrium. Based on this proof, an algorithm can be devised for computing the equilibrium, which is useful in the comparative-static and the counterfactual analysis.

Suggested Citation

  • Ma, Wei & Naraidoo, Ruthira & Perugini, Francesco, 2023. "Computation of spatial equilibria in the Ottaviano–Tabuchi–Thisse model," Economics Letters, Elsevier, vol. 223(C).
    • Handle: RePEc:eee:ecolet:v:223:y:2023:i:c:s0165176523000113
    DOI: 10.1016/j.econlet.2023.110986
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    References listed on IDEAS

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    1. Mas-Colell,Andreu, 1990. "The Theory of General Economic Equilibrium," Cambridge Books, Cambridge University Press, number 9780521388702.
    2. Ottaviano, Gianmarco I. P. & Thisse, Jacques-Francois, 2002. "Integration, agglomeration and the political economics of factor mobility," Journal of Public Economics, Elsevier, vol. 83(3), pages 429-456, March.
    3. Ma, Wei, 2015. "A simple method for computing equilibria when asset markets are incomplete," Journal of Economic Dynamics and Control, Elsevier, vol. 52(C), pages 32-38.
    4. Gianmarco Ottaviano & Takatoshi Tabuchi & Jacques-François Thisse, 2021. "Agglomeration And Trade Revisited," World Scientific Book Chapters, in: Firms and Workers in a Globalized World Larger Markets, Tougher Competition, chapter 3, pages 59-85, World Scientific Publishing Co. Pte. Ltd..
    5. Redding, Stephen J., 2016. "Goods trade, factor mobility and welfare," Journal of International Economics, Elsevier, vol. 101(C), pages 148-167.
    6. Ginsburgh, Victor & Papageorgiou, Yorgo & Thisse, Jacques-Francois, 1985. "On existence and stability of spatial equilibria and steady-states," Regional Science and Urban Economics, Elsevier, vol. 15(2), pages 149-158, June.
    7. Tabuchi, Takatoshi & Thisse, Jacques-Francois, 2002. "Taste heterogeneity, labor mobility and economic geography," Journal of Development Economics, Elsevier, vol. 69(1), pages 155-177, October.
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