On Pitchforks and Tomahawks
The core-periphery model by Krugman (1991) has two 'dramatic' implications: catastrophic agglomeration and locational hysteresis. We study this seminal model with CES instead of Cobb-Douglas upper tier preferences. This small generalization suffices to change these stark implications. For a wide range of parameters we find that the model exhibits instead a smooth and easily reversible transition from symmetry to agglomeration.
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- Ottaviano, Gianmarco & Thisse, Jacques-François, 2003.
"Agglomeration and Economic Geography,"
CEPR Discussion Papers
3838, C.E.P.R. Discussion Papers.
- OTTAVIANO, Gianmarco & THISSE, Jacques-François, . "Agglomeration and economic geography," CORE Discussion Papers RP -1725, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- OTTAVIANO, Gianmarco & THISSE, Jacques-François, 2003. "Agglomeration and economic geography," CORE Discussion Papers 2003016, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Keith Head & Thierry Mayer, 2004.
"The Empirics of Agglomeration and Trade,"
Sciences Po publications
info:hdl:2441/10191, Sciences Po.
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