Agglomeration and Spreading in an Asymmetric World

19 Pages Posted: 20 Apr 2013

Date Written: May 2013

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

Suggested Citation

Sidorov, Alexander and Zhelobodko, Evgeny, Agglomeration and Spreading in an Asymmetric World (May 2013). Review of Development Economics, Vol. 17, Issue 2, pp. 201-219, 2013, Available at SSRN: https://ssrn.com/abstract=2254208 or http://dx.doi.org/10.1111/rode.12027

Alexander Sidorov

Sobolev Institute of Mathematics ( email )

630090 Novosibirsk
United States

Evgeny Zhelobodko

In memoriam

No Address Available

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