Agglomeration and welfare of the Krugman model in a continuous space

Kensuke Ohtake

Mathematical Social Sciences, 2023, vol. 123, issue C, 137-142

Abstract: Two spatial equilibria, agglomeration, and dispersion, in a continuous space core–periphery model, are examined to discuss which equilibrium is socially preferred. It is shown that when transport cost is lower than a critical value, the agglomeration equilibrium is preferable in the sense of the Scitovszky criterion, while when the transport cost is above the critical value, the two equilibria cannot be ordered in the sense of the Scitovszky criterion.

Keywords: Compensation principle; Continuous racetrack economy; Core–periphery model; Economic agglomeration; Transport cost; Welfare economics (search for similar items in EconPapers)
JEL-codes: D60 R12 R40 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:matsoc:v:123:y:2023:i:c:p:137-142

DOI: 10.1016/j.mathsocsci.2023.04.001

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