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Title:On pitchforks and tomahawks PDF Logo
Authors:Pflüger, Michael
Südekum, Jens
Issue Date:2007
Series/Report no.:IZA Discussion Papers 3258
Abstract:The core-periphery model by Krugman (1991) has two 'dramatic' implications: catastrophic agglomeration and locational hysteresis. We study this seminal model with CES instead of Cobb-Douglas upper tier preferences. This small generalization suffices to change these stark implications. For a wide range of parameters we find that the model exhibits instead a smooth and easily reversible transition from symmetry to agglomeration.
Subjects:Core-periphery model
new economic geography
agglomeration
bifurcation pattern
JEL:F12
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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