Resource effects in the Core-Periphery model

María Pilar Martínez-García () and Jose Rodolfo Morales ()
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María Pilar Martínez-García: Facultad de Economía y Empresa. University of Murcia
Jose Rodolfo Morales: Facultad de Economía y Empresa. University of Murcia
Authors registered in the RePEc Author Service: María Pilar Martínez-García

No 201607, Gecomplexity Discussion Paper Series from Action IS1104 "The EU in the new complex geography of economic systems: models, tools and policy evaluation"

Abstract: This paper developes an extension of Krugman’s (1991) Core-Periphery model, by considering the traditional sector as a competitive primary sector that makes use of a renewable natural resource. The natural resource can be consumed or used as a raw material in the industrial sector. Three results stand out. First, the dynamics of the resource and its use as a raw material give rise to new dispersion forces: the resource and the primary price index effects. Second, the pattern that arises reverts the usual stability behavior in core-prephery models. And third, different types of bifurcationsarise, resulting in different patterns of agglomeration-dispersion. In addition to transport costs, the productivity of the resource sector plays a key role in the bifurcation diagrams.

Keywords: natural resources; new economic geography. (search for similar items in EconPapers)
JEL-codes: F12 F18 Q01 R12 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2016-07, Revised 2016-07
New Economics Papers: this item is included in nep-geo and nep-ure
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http://www.gecomplexity-cost.eu/repec/cst/wpaper/geco_dp_7_2016.pdf First version, 2016 (application/pdf)

Related works:
Journal Article: Resource effect in the Core–Periphery model (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:cst:wpaper:201607

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