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Analytical Characteristics of the Core-Periphery Model

Author

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  • Andreas Lange

    (Department of Economics, University of Hamburg, Germany, andreas.lange@wiso.uni-hamburg.de)

  • Martin F. Quaas

    (Department of Economics, University of Kiel, Germany)

Abstract

The authors propose a novel approach to analyze core—periphery models. By expressing the model in terms of relative wages, the authors characterize market equilibria and full equilibria in which no migration incentives exist. The authors reconsider Krugman’s model and show that full equilibria are determined by a single function of relative nominal wage rates. This allows them to analytically derive the stability properties of all full equilibria. They further show that migration is more driven by differences in the price index than by differences in the nominal wage rate.

Suggested Citation

  • Andreas Lange & Martin F. Quaas, 2010. "Analytical Characteristics of the Core-Periphery Model," International Regional Science Review, , vol. 33(4), pages 437-455, October.
    • Handle: RePEc:sae:inrsre:v:33:y:2010:i:4:p:437-455
    DOI: 10.1177/0160017610370606
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    References listed on IDEAS

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    1. Richard Baldwin & Rikard Forslid & Philippe Martin & Gianmarco Ottaviano & Frederic Robert-Nicoud, 2005. "Economic Geography and Public Policy," Economics Books, Princeton University Press, edition 1, number 7524.
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    5. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    6. J.Peter Neary, 2001. "Of Hype and Hyperbolas: Introducing the New Economic Geography," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 536-561, June.
    7. Armin Schmutzler, 1999. "The New Economic Geography," Journal of Economic Surveys, Wiley Blackwell, vol. 13(4), pages 355-379, September.
    8. Frédéric Robert-Nicoud, 2005. "The structure of simple 'New Economic Geography' models (or, On identical twins)," Journal of Economic Geography, Oxford University Press, vol. 5(2), pages 201-234, April.
    9. Mossay, Pascal, 2006. "The core-periphery model: A note on the existence and uniqueness of short-run equilibrium," Journal of Urban Economics, Elsevier, vol. 59(3), pages 389-393, May.
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    Cited by:

    1. Joanna P. Ganning & Kathy Baylis & Bumsoo Lee, 2013. "Spread And Backwash Effects For Nonmetropolitan Communities In The U.S," Journal of Regional Science, Wiley Blackwell, vol. 53(3), pages 464-480, August.

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