Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/35045
Authors: 
Pflüger, Michael
Südekum, Jens
Year of Publication: 
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

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