A third sector in the core-periphery model: non-tradable goods

Vasco Leite (), Sofia Castro () and Joao Correia-da-Silva

The Annals of Regional Science, 2013, vol. 50, issue 1, 108 pages

Abstract: We extend an analytically solvable core-periphery model by introducing a monopolistically competitive sector of non-tradable goods that is mobile across regions. We find that when the elasticity of substitution among non-tradable goods is very low, there is agglomeration of all the production (of both tradable and non-tradable goods). When the elasticity of substitution among non-tradable goods is sufficiently high (“no black-hole” condition), then there is symmetric dispersion of all the production, if trade costs are high; or full agglomeration of the production of tradable goods with partial agglomeration of the production of non-tradable goods, if trade costs are low. Copyright Springer-Verlag 2013

Keywords: F12; R12 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (4)

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Working Paper: A third sector in the core-periphery model: non-tradable goods (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:spr:anresc:v:50:y:2013:i:1:p:71-108

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DOI: 10.1007/s00168-011-0479-8

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