The Complete Solution of the Core-Periphery Model for two Regions Using Successive Approximations

Catalin Angelo Ioan and Gina Ioan ()
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Gina Ioan: Danubius University of Galati, Romania

Acta Universitatis Danubius. OEconomica, 2012, issue 1(1), 95-106

Abstract: In this paper it is give the complete solution, using the Newton’s method of approximation, for the well known Krugman’s Core-Periphery model for two regions. After the process of reduction of the system of conditions, using appropriate substitutions, it is obtained one equation which is the key of the problem’s solving. After the presentation of the iterative formula which gives the solution, the principal indicators (regional incomes, the prices indexes of manufactured goods and the real wage of workers) are calculated.

Keywords: Core-Periphery; region; wage (search for similar items in EconPapers)
Date: 2012
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