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Agglomeration and welfare of the Krugman model in a continuous space

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  • Ohtake, Kensuke

Abstract

Two spatial equilibria, agglomeration, and dispersion, in a continuous space core–periphery model, are examined to discuss which equilibrium is socially preferred. It is shown that when transport cost is lower than a critical value, the agglomeration equilibrium is preferable in the sense of the Scitovszky criterion, while when the transport cost is above the critical value, the two equilibria cannot be ordered in the sense of the Scitovszky criterion.

Suggested Citation

  • Ohtake, Kensuke, 2023. "Agglomeration and welfare of the Krugman model in a continuous space," Mathematical Social Sciences, Elsevier, vol. 123(C), pages 137-142.
    • Handle: RePEc:eee:matsoc:v:123:y:2023:i:c:p:137-142
    DOI: 10.1016/j.mathsocsci.2023.04.001
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    References listed on IDEAS

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    1. 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.
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    More about this item

    Keywords

    Compensation principle; Continuous racetrack economy; Core–periphery model; Economic agglomeration; Transport cost; Welfare economics;
    All these keywords.

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General
    • D60 - Microeconomics - - Welfare Economics - - - General

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