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The Core-Periphery Model: Existence And Uniqueness Of Short-Run Equilibrium

Author

Listed:
  • Pascal Mossay

    (Universidad de Alicante)

Abstract

We consider the core-periphery model by Krugman (1991). The nature and stability of the possible steady states of the model have been made progressively precise, see Fujita et al. (1999) and Baldwin et al. (2003). In that model as well as in all the new economic geography models that have been derived from it, the short-run (instantaneous) equilibrium is implicitly determined by the current labor distribution across regions. The numerical computations used so far to determine the short-run equilibrium, tend to suggest its existence. In this work, an existence and uniqueness proof of short-run equilibrium is provided.

Suggested Citation

  • Pascal Mossay, 2005. "The Core-Periphery Model: Existence And Uniqueness Of Short-Run Equilibrium," Working Papers. Serie AD 2005-37, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    • Handle: RePEc:ivi:wpasad:2005-37
    as

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    File URL: http://www.ivie.es/downloads/docs/wpasad/wpasad-2005-37.pdf
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    References listed on IDEAS

    as
    1. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, December.
    2. 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, December.
    3. Gianmarco I. P. Ottaviano & Diego Puga, 1998. "Agglomeration in the Global Economy: A Survey of the ‘New Economic Geography’," The World Economy, Wiley Blackwell, vol. 21(6), pages 707-731, August.
    4. Fujita,Masahisa & Thisse,Jacques-François, 2013. "Economics of Agglomeration," Cambridge Books, Cambridge University Press, number 9781107001411, January.
    5. 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.
    6. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
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    Keywords

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    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium

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