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Agglomeration and welfare of the Krugman model in a continuous space

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  • Kensuke Ohtake

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 Scitovszky, while when the transport cost is above the critical value, the two equilibria can not be ordered in the sense of Scitovszky.

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  • Kensuke Ohtake, 2022. "Agglomeration and welfare of the Krugman model in a continuous space," Papers 2208.01972, arXiv.org, revised Feb 2023.
    • Handle: RePEc:arx:papers:2208.01972
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    References listed on IDEAS

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    1. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, April.
    2. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    3. Kensuke Ohtake & Atsushi Yagi, 2022. "Pointwise agglomeration in continuous racetrack model," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 21(2), pages 211-235, May.
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