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| Author: | Krugman, P. |
| Title: | Increasing returns and economic geography |
| Journal: | Journal of Political Economy
1991 : JUN, VOL. 99:3, p. 483-499 |
| Index terms: | ECONOMIC GEOGRAPHY RATE OF RETURN ECONOMIES OF SCALE MANUFACTURING REGIONAL DIFFERENCES NATIONAL INCOME |
| Language: | eng |
| Abstract: | A simple model is developed to show how a country can endogenously become differentiated into an industrialized "core" and agricultural "periphery". In order to utilize the economy of scale while minimizing transport costs, manufacturing firms tend to locate in the region with larger demand, but the location of demand itself depends on the distribution of manufacturing. Emergence of a core-periphery pattern depends on transportation costs, economy of scale, and the share of manufacturing in national income. |
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