History versus Expectations in Economic Geography Reconsidered

Daisuke Oyama

MPRA Paper from University Library of Munich, Germany

Abstract: This paper studies global stability of spatial configurations in a dynamic two-region model with quadratic adjustment costs where rational migrants make migration decisions so as to maximize their discounted future utilities. A global analysis is conducted to show that, except for knife-edge cases with symmetric regions, there exists a unique spatial configuration that is absorbing and globally accessible whenever the degree of friction is sufficiently small, and such a configuration is characterized as the unique maximizer of the potential function of the underlying static model.

Keywords: economic geography; mutiple equilibria; forward-looking expectation; global stability; potential (search for similar items in EconPapers)
JEL-codes: C61 C62 R12 (search for similar items in EconPapers)
Date: 2006-09-27
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: History versus expectations in economic geography reconsidered (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:9287

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