Multiple equilibria, stability, and asymmetries in Krugman's core†periphery model**Financial support from grant 261†26 of the University of Zaragoza and from DGES grant PB97†1028 are gratefully acknowledged. We would like to thank two anonymous referees for their comments and suggestions

Paul Krugman developed a general equilibrium model with two sectors and two regions in 1991, from which two patterns of industrial localization could be endogenously deduced, dispersion at 50% and total concentration. The introduction of transport costs, which depend on the size of the population, are meant to capture effects produced by the trade†off between congestion costs and advantages derived from the possession of infrastructure, thus generates stable asymmetric multiple equilibria. The outcome of asymmetric stable multiple equilibria demonstrates the fruitfulness of this extension of the original model.