"Stability of Spatial Equilibrium"

This paper focuses on externalities between economic agents. We consider spatial dis- tribution of economic activities in a multiregional dynamical system, where regions may be interpreted as clubs, social subgroups, species, or strategies. Our dynamics includes gravity models and replicator dynamics as special cases. Assuming that other variables, such as prices are solved as a function of the population distribution, we analyze both interior and corner equilibria of spatial distribution in a general class of dynamics, including the replicator dynamics and the gravity model. We derive the exact conditions for stable equilibrium and give some interpretations of the stability conditions. We show that interior equilibria are stable in the presence of strong agglomeration economies, but unstable in the presence of strong congestion diseconomies.

The Home Market Effect and the Agricultural Sector

The "home market effect" (HME) is an essential topic of the new trade theory. Assuming the transport costs only for the manufacturing goods, Krugman (1980) shows that the country with bigger market size is a net exporter. The assumption of free transport of the agricultural good was shown mattering a great deal rather than being innocuous by Davis (1998). Particularly, when manufacturing and agricultural goods have identical transport costs, the HME disappears. However, we find that the homogeneous-agricultural-good assumption in Davis' model derives the discontinuity of inverse demand functions, which causes the disappearance of the HME. After establishing an analytical solvable model and assuming two differentiated agricultural goods in two countries, we find that the HME does exist even if the transport cost of the agricultural goods is positive.

Regional Specialization via Differences in Transport Costs

This paper examines a new economic geography model with multiple (three) industries and urban costs. The industries are asymmetric in their transport costs. The following results were obtained. First, if transport costs sufficiently decrease whereas commuting costs are constant, we have three stable location patterns; full dispersion, partial regional specialization, and complete regional specialization. Second, if commuting costs sufficiently decrease (resp. increase) whereas transport costs are constant, we have full agglomeration (resp. full dispersion). The cases with medium value of transport and commuting costs and with multiple (three) regions are analyzed by use of numerical simulation.

Economic Integration and Welfare: Manufacturing vs. Agricultural Markets

In the literature of new trade theory, most papers study the industrial location by imposing the assumption of free transportation in the agricultural sector. This paper explicitly incorporates arbitrary transport costs in both the manufacturing and the agricultural sectors into the Helpman-Krugman-Davis model of two countries and one production factor. The following results are obtained. First, we find a necessary and sufficient condition for the home market effect (HME) to be observed. Secondly, we find that integrating manufacturing markets has contrastive impacts on two countries to integrating agricultural markets. Our results are suggestive for the understanding of various international trade agreements.

Uloga veličine zemlje u prostornoj ekonomiji: Istraživanje učinaka domaćeg tržišta

This paper surveys the growing literature on the home market effects (HMEs) in spatial economics. The HMEs are utilized to disclose the role of country size in the configuration of economic activity. Various HMEs display distinctive features of size advantage and they are originally obtained from different models. Recent studies find that these features are closely related to each other. The following questions are answered. Are these HMEs equivalent under some conditions? Are some of the properties more general than others? Why do the theoretical studies and empirical studies obtain inconsistent results?U radu se istražuje rastuća literatura o učincima domaćeg tržišta (HMEs) u prostornoj ekonomiji. HME-ovi se koriste da bi se utvrdila uloga veličine zemlje u konfiguraciji ekonomske aktivnosti. Različiti HME-ovi prikazuju distinktivne osobine prednosti veličine i izvorno su dobiveni iz različitih modela. Najnovija istraživanja potvrđuju da su te osobine usko povezane jedna s drugom. Ovim istraživanjem dobiveni su odgovori na slijedeća pitanja. Jesu li ovi HME-ovi pod nekim uvjetima ekvivalentni? Jesu li neke od osobina općenitije od drugih? Zašto se teorijskim i empirijskim istraživanjima dobivaju nedosljedni rezultati

Uloga veličine zemlje u prostornoj ekonomiji: Istraživanje učinaka domaćeg tržišta

This paper surveys the growing literature on the home market effects (HMEs) in spatial economics. The HMEs are utilized to disclose the role of country size in the configuration of economic activity. Various HMEs display distinctive features of size advantage and they are originally obtained from different models. Recent studies find that these features are closely related to each other. The following questions are answered. Are these HMEs equivalent under some conditions? Are some of the properties more general than others? Why do the theoretical studies and empirical studies obtain inconsistent results?U radu se istražuje rastuća literatura o učincima domaćeg tržišta (HMEs) u prostornoj ekonomiji. HME-ovi se koriste da bi se utvrdila uloga veličine zemlje u konfiguraciji ekonomske aktivnosti. Različiti HME-ovi prikazuju distinktivne osobine prednosti veličine i izvorno su dobiveni iz različitih modela. Najnovija istraživanja potvrđuju da su te osobine usko povezane jedna s drugom. Ovim istraživanjem dobiveni su odgovori na slijedeća pitanja. Jesu li ovi HME-ovi pod nekim uvjetima ekvivalentni? Jesu li neke od osobina općenitije od drugih? Zašto se teorijskim i empirijskim istraživanjima dobivaju nedosljedni rezultati

"On the Evolution of a Multi-regional System"

We study the effects of decrease in trade costs on the spatial distribution of industry in multi-regional economy, when a rise in the regional population of workers generates higher urban costs. We show that high and low trade costs imply the all regions involve positive share of the industrial sector. When urban costs are linear, there exists stable equilibrium for almost all values of trade costs. Furthermore, as trade costs fall, there is path of stable equilibria such that the industry is, first, agglomerated into a decreasing number of regions and, then, dipersed among a growing number of regions. The second phase arises because of the increasing urban costs associated with the process of agglomeration.