A third sector in the core-periphery model: non-tradable goods

Vasco Leite (), Sofia B.S.D. Castro () and Joao Correia-da-Silva
Additional contact information
Sofia B.S.D. Castro: CMUP and Faculdade de Economia, Universidade do Porto

FEP Working Papers from Universidade do Porto, Faculdade de Economia do Porto

Abstract: We extend an analytically solvable core-periphery model by introducing a monopolistically competitive sector of non-tradable goods. We study how trade costs affect the spatial distribution of economic activity. Trade costs have no effect when the elasticity of substitution among non-tradable goods is low. In this case, concentration of all production (of tradable and non-tradable goods) is the unique equilibrium. When the elasticity of substitution among non-tradable goods is high, we find two equilibrium configurations: symmetric dispersion of the production of tradable and non-tradable goods, if trade costs are high; and concentration of production of tradable goods with asymmetric dispersion of production of non-tradable goods, if trade costs are low.

Keywords: New economic geography; Core-periphery model; Footloose entrepreneur; Nontradable goods (search for similar items in EconPapers)
JEL-codes: F12 R12 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2009-12
New Economics Papers: this item is included in nep-geo, nep-int and nep-ure
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.fep.up.pt/investigacao/workingpapers/09.12.17_wp352.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.fep.up.pt/investigacao/workingpapers/09.12.17_wp352.pdf [302 Found]--> https://fep.up.pt/investigacao/workingpapers/09.12.17_wp352.pdf)

Related works:
Journal Article: A third sector in the core-periphery model: non-tradable goods (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:por:fepwps:352

Access Statistics for this paper

More papers in FEP Working Papers from Universidade do Porto, Faculdade de Economia do Porto Contact information at EDIRC.
Bibliographic data for series maintained by ().