THE CORE-PERIPHERY MODEL: EXISTENCE AND UNIQUENESS OF SHORT-RUN EQUILIBRIUM

Pascal Mossay
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Pascal Mossay: Universidad de Alicante

Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: We consider the core-periphery model by Krugman (1991). The nature and stability of the possible steady states of the model have been made progressively precise, see Fujita et al. (1999) and Baldwin et al. (2003). In that model as well as in all the new economic geography models that have been derived from it, the short-run (instantaneous) equilibrium is implicitly determined by the current labor distribution across regions. The numerical computations used so far to determine the short-run equilibrium, tend to suggest its existence. In this work, an existence and uniqueness proof of short-run equilibrium is provided.

Keywords: core-periphery; economic geography; fixed point F12; R12; R23; C62 (search for similar items in EconPapers)
JEL-codes: C62 F12 R12 R23 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2005-12
New Economics Papers: this item is included in nep-geo
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