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NEGATIVE FEEDBACKS IN THE ECONOMY AND INDUSTRIAL LOCATION *
Author(s) -
Brakman Steven,
Garretsen Harry,
Gigengack Richard,
Marrewijk Charles,
Wagenvoort Rien
Publication year - 1996
Publication title -
journal of regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.171
H-Index - 79
eISSN - 1467-9787
pISSN - 0022-4146
DOI - 10.1111/j.1467-9787.1996.tb01122.x
Subject(s) - competition (biology) , economics , production (economics) , economic geography , microeconomics , ecology , biology
. Incorporating regional asymmetry and negative feedbacks (congestion) in a model of economic geography and international trade shows that complete specialization of production at one location is unlikely. We identify an agglomerating force: the home market effect, and two spreading forces, competition for demand from immobile sectors of production and congestion. We demonstrate that negative feedbacks can explain the economic viability of small industrial regions observed in the real world. Simulations clarify the basic structure of the model.