The Impact of Exogenous Asymmetry on Trade and Agglomeration in Core-Periphery Model

Sidorov, A. V.

doi:10.2139/ssrn.1787832

Cited by 1 publication

(11 citation statements)

References 25 publications

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“…More interestingly, with regard to agglomeration, we now characterize the behavior of industrial real wages with respect to the farmer's share, θ .Proposition Home real wage, V H , of industrial labor, as well as the relative industrial real wage,

\frac{V_{H}}{V_{F}}

, both increases with respect to the Home agricultural population share, θ. Proof The proof is similar to the previous proposition but more cumbersome; see Lemma 8 in Sidorov (), A.4. □…”

Section: Analysis Of Short‐run Equilibriummentioning

confidence: 76%

“…We ensure that

\frac{\partial F}{\partial x} < 0

(see ) and

\frac{\partial F}{\partial θ} > 0

for all admissible parameters and x > 0; therefore,

\frac{\partial x *}{\partial θ} = - (\frac{\partial F}{\partial θ}) / (\frac{\partial F}{\partial x}) > 0.

This inequality implies that function

\frac{w_{H}^{*}}{w_{F}^{*}} (θ) = {(x * (θ))}^{\frac{1}{σ}}

increases with respect to θ . The same goes for the nominal Home wage

w_{H}^{*} (θ) = \frac{μ}{1 - μ} \cdot \frac{\frac{L^{A}}{L} \cdot \frac{w_{H}^{*}}{w_{F}^{*}} (θ)}{λ \cdot \frac{w_{H}^{*}}{w_{F}^{*}} (θ) + (1 - λ)}

which is the superposition of two increasing functions; see also Sidorov (), Lemma 2, A.2. □…”

Section: Analysis Of Short‐run Equilibriummentioning

confidence: 76%

“…Its impact is as follows.Proposition When the trade freeness, φ, exceeds the threshold φ w ( μ , α ) , the relative industrial wage,

\frac{w_{H}}{w_{F}}

, increases with respect to industrial labor share, λ, but

\frac{w_{H}}{w_{F}}

decreases when there is a lower degree of trade freeness φ < φ w ( μ , α ) and remains constant in the boundary case, φ = φ w ( μ , α ) . Proof See Sidorov (), Lemma 4 in A.2. □ We would say that increasing λ can be interpreted as some immigration into the Home region.…”

Section: Analysis Of Short‐run Equilibriummentioning

confidence: 99%

“…The Home farmers’ real wage,

V_{H}^{A}

, and their relative real wage,

V_{H}^{A} / V_{F}^{A}

, thereby both decrease with θ. Proof See Sidorov (), A.3. □This statement, as well as the previous one, is supported by some empirical evidences, such as Roos (), that appears natural: too much competition amongst immobile labor should decrease the real wage.…”

Section: Analysis Of Short‐run Equilibriummentioning

confidence: 99%

“…The present paper overcomes “intractability” and provides a comprehensive study of Krugman's CP model in its general setting, including both symmetric and asymmetric agricultural populations. Only the clarifying proofs and intermediate results are included, the detailed versions remaining in the working paper by Sidorov ().…”

Section: Introductionmentioning

confidence: 99%

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Agglomeration and Spreading in an Asymmetric World

Sidorov

Zhelobodko

2013

Review Development Economics

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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 described. We show that in the case of noticeable agricultural asymmetry, all mobile labor inevitably accumulates in countries with larger agricultural populations.

show abstract

\frac{V_{H}}{V_{F}}

, both increases with respect to the Home agricultural population share, θ. Proof The proof is similar to the previous proposition but more cumbersome; see Lemma 8 in Sidorov (), A.4. □…”

Section: Analysis Of Short‐run Equilibriummentioning

confidence: 76%

“…We ensure that

\frac{\partial F}{\partial x} < 0

(see ) and

\frac{\partial F}{\partial θ} > 0

for all admissible parameters and x > 0; therefore,

\frac{\partial x *}{\partial θ} = - (\frac{\partial F}{\partial θ}) / (\frac{\partial F}{\partial x}) > 0.

This inequality implies that function

\frac{w_{H}^{*}}{w_{F}^{*}} (θ) = {(x * (θ))}^{\frac{1}{σ}}

increases with respect to θ . The same goes for the nominal Home wage

w_{H}^{*} (θ) = \frac{μ}{1 - μ} \cdot \frac{\frac{L^{A}}{L} \cdot \frac{w_{H}^{*}}{w_{F}^{*}} (θ)}{λ \cdot \frac{w_{H}^{*}}{w_{F}^{*}} (θ) + (1 - λ)}

which is the superposition of two increasing functions; see also Sidorov (), Lemma 2, A.2. □…”

Section: Analysis Of Short‐run Equilibriummentioning

confidence: 76%

“…Its impact is as follows.Proposition When the trade freeness, φ, exceeds the threshold φ w ( μ , α ) , the relative industrial wage,

\frac{w_{H}}{w_{F}}

, increases with respect to industrial labor share, λ, but

\frac{w_{H}}{w_{F}}

Section: Analysis Of Short‐run Equilibriummentioning

confidence: 99%

“…The Home farmers’ real wage,

V_{H}^{A}

, and their relative real wage,

V_{H}^{A} / V_{F}^{A}

Section: Analysis Of Short‐run Equilibriummentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Agglomeration and Spreading in an Asymmetric World

Sidorov

Zhelobodko

2013

Review Development Economics

View full text Add to dashboard Cite

show abstract

The Impact of Exogenous Asymmetry on Trade and Agglomeration in Core-Periphery Model

Cited by 1 publication

References 25 publications

Agglomeration and Spreading in an Asymmetric World

Agglomeration and Spreading in an Asymmetric World

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