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On the evolution of a multi-regional system

Author

Listed:
  • TABUCHI, Takatoshi
  • THISSE, Jacques-François
  • ZENG, Dao-Zhi
Abstract
We study the effects of a decrease in trade costs on the spatial distribution of industry in a multi-regional economy, when a rise in the regional population of workers generates higher urban costs. We show that high and low trade costs imply that all regions involve a positive share of the industrial sector. When urban costs are linear, there exists a stable equilibrium for almost all values of trade costs. Furthermore, as trade costs fall, there is a path of stable equilibria such that the industry is, first, agglomerated into a decreasing number of regions and, then, dispersed among a growing number of regions. The second phase arises because of the increasing urban costs associated with the process of agglomeration.

Suggested Citation

  • TABUCHI, Takatoshi & THISSE, Jacques-François & ZENG, Dao-Zhi, 2001. "On the evolution of a multi-regional system," LIDAM Discussion Papers CORE 2001003, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2001003
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    File URL: https://sites.uclouvain.be/core/publications/coredp/coredp2001.html
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    Cited by:

    1. Sidorov, A., 2013. "Stability of Totally Agglomerated Equilibrium in a Multiregional Core-Periphery Model," Journal of the New Economic Association, New Economic Association, vol. 17(1), pages 44-62.
    2. Takatoshi Tabuchi & Dao‐Zhi Zeng, 2004. "Stability of Spatial Equilibrium," Journal of Regional Science, Wiley Blackwell, vol. 44(4), pages 641-660, November.

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    More about this item

    Keywords

    multi-regional system; economic geography; agglomeration; transport costs; urban costs;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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