Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/33888 
Year of Publication: 
2006
Series/Report no.: 
IZA Discussion Papers No. 2256
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
Models of the new economic geography share a number of common conclusions, but also exhibit notable differences, in particular with respect to the shape of the location pattern and the efficiency of the market equilibrium. This reflects the fact that these models rely heavily on specific functional forms. In this paper we approach the properties of the 'footloose entrepreneur' class of new economic geography models with a unifying framework based on the indirect utility function of mobile agents. This approach has several payoffs. We are able to provide general, yet handy, formulae to determine the break point, the bifurcation pattern and the welfare properties of the market equilibrium. Moreover, an application of this framework allows us to show how specific results in the literature can be reconciled as special cases, thereby allowing us to highlight the origin of their differences.
Subjects: 
new economic geography
agglomeration
location pattern
regional policy
JEL: 
R12
R50
F12
F15
F22
Document Type: 
Working Paper

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