The authors thank Sergey Kokovin for his kind assistance in preparation of the manuscript and the anonymous referee for helpful comments and advice. This research was financed by Grant No. 09-5581 of Economic Education and Research Consortium. We also gratefully acknowledge the financial support from the Russian Federation Government under Grant No. 11.G34.31.0059 and from the Russian Foundation of Basic Researches, Grant No. 12-06-00174-a.
Agglomeration and Spreading in an Asymmetric World
Article first published online: 19 APR 2013
© 2013 Blackwell Publishing Ltd
Review of Development Economics
Volume 17, Issue 2, pages 201–219, May 2013
How to Cite
Sidorov, A. V. and Zhelobodko, E. (2013), Agglomeration and Spreading in an Asymmetric World. Review of Development Economics, 17: 201–219. doi: 10.1111/rode.12027
- Issue published online: 19 APR 2013
- Article first published online: 19 APR 2013
- Economic Education and Research Consortium. Grant Number: 09-5581
- Russian Federation Government. Grant Number: 11.G34.31.0059
- Russian Foundation of Basic Researches. Grant Number: 12-06-00174-a
We study Krugman'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.