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The Complete Solution of the Core-Periphery Model for two Regions Using Successive Approximations

Author

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  • Catalin Angelo Ioan

    (Danubius University of Galati, Romania)

  • Gina Ioan

    (Danubius University of Galati, Romania)

Abstract

In this paper it is give the complete solution, using the Newton’s method of approximation, for the well known Krugman’s Core-Periphery model for two regions. After the process of reduction of the system of conditions, using appropriate substitutions, it is obtained one equation which is the key of the problem’s solving. After the presentation of the iterative formula which gives the solution, the principal indicators (regional incomes, the prices indexes of manufactured goods and the real wage of workers) are calculated.

Suggested Citation

  • Catalin Angelo Ioan & Gina Ioan, 2012. "The Complete Solution of the Core-Periphery Model for two Regions Using Successive Approximations," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 1(1), pages 95-106, March.
    • Handle: RePEc:dug:actaec:y:2012:i:1:p:95-106
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    File URL: http://journals.univ-danubius.ro/index.php/oeconomica/article/view/951/1083
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    References listed on IDEAS

    as
    1. Mattli,Walter, 1999. "The Logic of Regional Integration," Cambridge Books, Cambridge University Press, number 9780521635363, October.
    2. Mattli,Walter, 1999. "The Logic of Regional Integration," Cambridge Books, Cambridge University Press, number 9780521632270, October.
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    Keywords

    Core-Periphery; region; wage;
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