articles: Multiple equilibria, stability, and asymmetries in Krugman's core-periphery model

Luis Lanaspa (llanas@unizar.es) and Fernando Sanz (fsanz@posta.unizar.es)
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Fernando Sanz: Faculty of Economics and Business Studies, University of Zaragoza, Doctor Cerrada 3, 50005 Zaragoza, Spain

Papers in Regional Science, 2001, vol. 80, issue 4, 425-438

Abstract: Paul Krugman developed a general equilibrium model with two sectors and two regions in 1991, from which two patterns of industrial localization could be endogenously deduced, dispersion at 50% and total concentration. The introduction of transport costs, which depend on the size of the population, are meant to capture effects produced by the trade-off between congestion costs and advantages derived from the possession of infrastructure, thus generates stable asymmetric multiple equilibria. The outcome of asymmetric stable multiple equilibria demonstrates the fruitfulness of this extension of the original model.

Keywords: Industrial concentration; infrastructures; stable asymmetries (search for similar items in EconPapers)
JEL-codes: F12 R12 (search for similar items in EconPapers)
Date: 2001-10-25
Note: Received: 23 June 1998
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Citations: View citations in EconPapers (8)

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