A third sector in the core-periphery model: non-tradable goods

Castro, Sofia B. S. D, Correia da silva, Joao and Leite, Vasco (2013) A third sector in the core-periphery model: non-tradable goods. Annals of Regional Science, 50 (1). pp. 71-108.

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Official URL: http://tse-fr.eu/pub/30095

Abstract

We extend an analytically solvable core-periphery model by introducing a monopolistically competitive sector of non-tradable goods that is mobile across regions. We find that when the elasticity of substitution among non-tradable goods is very low, there is agglomeration of all the production (of both tradable and non-tradable goods). When the elasticity of substitution among non-tradable goods is sufficiently high (“no black-hole” condition), then there is symmetric dispersion of all the production, if trade costs are high; or full agglomeration of the production of tradable goods with partial agglomeration of the production of non-tradable goods, if trade costs are low.

Item Type: Article
Language: English
Date: February 2013
Refereed: Yes
JEL codes: F12 - Models of Trade with Imperfect Competition and Scale Economies
R12 - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 22 Apr 2016 14:45
Last Modified: 07 Mar 2018 13:23
OAI ID: oai:tse-fr.eu:30095
URI: http://publications.ut-capitole.fr/id/eprint/19393

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