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Agglomeration and Spreading in an Asymmetric World
Author(s) -
Sidorov Alexander V.,
Zhelobodko Evgeny
Publication year - 2013
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/rode.12027
Subject(s) - economics , economies of agglomeration , real wages , agriculture , labor mobility , core (optical fiber) , general equilibrium theory , labour economics , wage , microeconomics , geography , materials science , archaeology , composite material
We study K rugman's core–periphery ( CP ) model for most general cases of nonidentical regions and fully characterize instant and long‐run equilibria. Assuming immobility of labor, we describe the behavior of equilibrium wages/real wages. Moreover, the relative wages/real wages of industrial workers can both increase and decrease with the population with which they are associated. Under the assumption of industrial labor mobility, possible patterns of economic evolution, as responses to trade freeness, are fully described. We show that in the case of noticeable agricultural asymmetry, all mobile labor inevitably accumulates in countries with larger agricultural populations.