2013
DOI: 10.1111/rode.12027
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Agglomeration and Spreading in an Asymmetric World

Abstract: We study Krugman's core–periphery (CP) model for most general cases of nonidentical regions and fully characterize instant and long‐run equilibria. Assuming immobility of labor, we describe the behavior of equilibrium wages/real wages. Moreover, the relative wages/real wages of industrial workers can both increase and decrease with the population with which they are associated. Under the assumption of industrial labor mobility, possible patterns of economic evolution, as responses to trade freeness, are fully … Show more

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Cited by 6 publications
(3 citation statements)
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“…A natural way to cope with this problem is to endow one region with a comparative advantage. When the number of A-farmers, say, exceeds that of B-farmers, Sidorov and Zhelobodko (2013) show that the interval of τ -values sustaining agglomeration in region A is always wider than that associated with region B. When the number of A-farmers is sufficiently high, regardless of the transport cost level, there exists a unique equilibrium, which is such that all firms set up in region A.…”
Section: The Core-periphery Structurementioning
confidence: 95%
“…A natural way to cope with this problem is to endow one region with a comparative advantage. When the number of A-farmers, say, exceeds that of B-farmers, Sidorov and Zhelobodko (2013) show that the interval of τ -values sustaining agglomeration in region A is always wider than that associated with region B. When the number of A-farmers is sufficiently high, regardless of the transport cost level, there exists a unique equilibrium, which is such that all firms set up in region A.…”
Section: The Core-periphery Structurementioning
confidence: 95%
“…where w M = w H M /w F M is a relative wage in this sector. Plugging ( 12), ( 19), (20), and ( 21) into ( 23) we obtain the equation for the relative wage w M as a function of mobile workers share λ:…”
Section: Partial Agglomerationmentioning
confidence: 99%
“…The first paper in the present issue, by Kichko (2018, in this issue), studies the joint impact of trade costs in all sectors and initial inequality between regions on spatial equilibria by mixing features of two pre-existing models of the New Economic Geography (NEG): one presented in the famous book by Fujita, Krugman, and Venables (1999), and another presented in a recent paper by Sidorov and Zhelobodko (2013). The first model introduces non-zero transport cost in the agricultural sector, and finds this can prevent the symmetric equilibrium from becoming unstable, and make agglomeration unsustainable for low transport costs in the industrial sector.…”
mentioning
confidence: 99%