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The Footloose Entrepreneur Model with 3 Regions

Author

Listed:
  • José Gaspar

    (CEF.UP and Faculdade de Economia, Universidade do Porto)

  • Sofia Balbina Santos Dias de Castro

    (CMUP e Faculdade de Economia, Universidade do Porto)

  • João Correia da Silva

    (CEF.UP and Faculdade de Economia, Universidade do Porto)

Abstract
We study a 3-region version of the Footloose Entrepreneur model by Forslid and Ottaviano (J Econ Geogr, 2003). We focus on the analysis of stability of three types of long-run equilibria: agglomeration, dispersion and partial dispersion. We find that the 3-region model exhibits more tendency for agglomeration and less tendency for dispersion than the 2-region model. We show numerical evidence suggesting that equilibria with partial dispersion are always unstable. We also discuss the existence and robustness of bifurcations in the 3-region model.

Suggested Citation

  • José Gaspar & Sofia Balbina Santos Dias de Castro & João Correia da Silva, 2013. "The Footloose Entrepreneur Model with 3 Regions," FEP Working Papers 496, Universidade do Porto, Faculdade de Economia do Porto.
    • Handle: RePEc:por:fepwps:496
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    File URL: http://www.fep.up.pt/investigacao/workingpapers/wp496.pdf
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    References listed on IDEAS

    as
    1. Richard Baldwin & Rikard Forslid & Philippe Martin & Gianmarco Ottaviano & Frederic Robert-Nicoud, 2005. "Economic Geography and Public Policy," Economics Books, Princeton University Press, edition 1, number 7524.
    2. Kiminori Matsuyama, 1991. "Increasing Returns, Industrialization, and Indeterminacy of Equilibrium," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 617-650.
    3. Sofia B.S.D. Castro & João Correia-da-Silva & Pascal Mossay, 2012. "The core-periphery model with three regions and more," Papers in Regional Science, Wiley Blackwell, vol. 91(2), pages 401-418, June.
    4. Rikard Forslid & Gianmarco I.P. Ottaviano, 2003. "An analytically solvable core-periphery model," Journal of Economic Geography, Oxford University Press, vol. 3(3), pages 229-240, July.
    5. Puga, Diego, 1999. "The rise and fall of regional inequalities," European Economic Review, Elsevier, vol. 43(2), pages 303-334, February.
    6. Ottaviano, Gianmarco I. P., 2001. "Monopolistic competition, trade, and endogenous spatial fluctuations," Regional Science and Urban Economics, Elsevier, vol. 31(1), pages 51-77, February.
    7. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    8. Frédéric Robert-Nicoud, 2005. "The structure of simple 'New Economic Geography' models (or, On identical twins)," Journal of Economic Geography, Oxford University Press, vol. 5(2), pages 201-234, April.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Ikeda, Kiyohiro & Aizawa, Hiroki & Gaspar, Jose M., 2020. "How and where satellite cities form around a large city: Bifurcation mechanism of a long narrow economy," MPRA Paper 104748, University Library of Munich, Germany.
    2. Karavidas Dionysios, 2020. "Market Access and Home Market Effect," Open Economics, De Gruyter, vol. 3(1), pages 42-49, January.
    3. José M. Gaspar & Sofia B. S. D. Castro & João Correia-da-Silva, 2018. "Agglomeration patterns in a multi-regional economy without income effects," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 66(4), pages 863-899, December.
    4. Aizawa, Hiroki & Ikeda, Kiyohiro & Osawa, Minoru & José M, Gasper, 2019. "Break and sustain bifurcations of S_N-invariant equidistant economy," MPRA Paper 97654, University Library of Munich, Germany.
    5. José Gaspar & Kiyohiro Ikeda & Mikihasa Onda, 2019. "Global bifurcation mechanism and local stability of identical and equidistant regions," Working Papers de Economia (Economics Working Papers) 04, Católica Porto Business School, Universidade Católica Portuguesa.
    6. José M. Gaspar, 2018. "A prospective review on New Economic Geography," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 61(2), pages 237-272, September.
    7. Karavidas Dionysios, 2020. "Market Access and Home Market Effect," Open Economics, De Gruyter, vol. 3(1), pages 42-49, January.

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    More about this item

    Keywords

    Core-Periphery; Footloose Entrepreneur; Three Regions;
    All these keywords.

    JEL classification:

    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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