The structure of simple 'New Economic Geography' models (or, On identical twins)

Details

Serval ID
serval:BIB_8CDEF8DCAA9B
Type
Article: article from journal or magazin.
Collection
Publications
Title
The structure of simple 'New Economic Geography' models (or, On identical twins)
Journal
Journal of Economic Geography
Author(s)
Robert-Nicoud F.
ISSN
1468-2702
Publication state
Published
Issued date
04/2005
Peer-reviewed
Oui
Volume
5
Number
2
Pages
201-234
Language
english
Abstract
This paper shows that the mathematical structure of the most widely used New Economic Geography models is identical, irrespective of the underlying agglomeration mechanism assumed (factor migration, input-output linkages, endogenous capital accumulation). This enables us to provide analytical proofs to four important and related results in the field. First, standard models display at most two interior steady states beyond the symmetric one. Second, when interior, asymmetric steady-states exist they are unstable. Third, location displays hysteresis. Finally, with forward looking agents a shock to expectations might trigger an equilibrium switch. This paper also stresses the empirical implications of the most important results derived in this study.
Keywords
New Economic Geography, Natural state space, Number of steady-states, Stability, Hysteresis, Expectations
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Create date
27/10/2016 10:48
Last modification date
20/08/2019 14:51
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