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Migration modelling in the New Economic Geography

Author

Listed:
  • Carmen CAMACHO

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

Abstract
The benchmark of this paper is the Fujita and Thisse (2002) core-periphery model, which adds a R&D sector with skilled labor to create new varieties for the modern sector. The number of R&D firms increases not only with the number of existing patents and knowledge spillovers but also with the number of skilled workers who can migrate and choose theregion offering the better lifetime salary.The main objective of the present work is to analyse the long-term consequences of the choice of the migration law in Fujita and Thisse(2002)and in other comparable models. After describing throughoutly our benchmark,we introduce a different migration law à la Krugman (1991).Although the change in the migration law implies that individuals do not foresee price changes and hence their choice is somehow less optimal, the steady state outcome does not vary qualitatively:the unique steady state is a symmetric distribution of labor across regions. Later we change the benchmark model to avoid the so called monotonic convergence hypothesis, about which we discuss at large in the paper. When we model the economy using Romer (1990) two sector model applied to two regions allowing for skilled migration, then there exists a solution path that converges to a steady state which exhibits a distribution of skilled workers amongst regions which is no longer symmetric. In effect, the new steady state depends on technology, fixed costs, knowledge spill-overs and transportation costs.

Suggested Citation

  • Carmen CAMACHO, 2010. "Migration modelling in the New Economic Geography," LIDAM Discussion Papers IRES 2010004, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvir:2010004
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    References listed on IDEAS

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    Cited by:

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    2. José M. Gaspar, 2018. "A prospective review on New Economic Geography," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 61(2), pages 237-272, September.
    3. Syarifuddin, Ferry, 2020. "An Optimal Islamic Investment Decision in Two-region Economy: The Case of Indonesia and Malaysia," MPRA Paper 104809, University Library of Munich, Germany.
    4. Ballestra, Luca Vincenzo, 2016. "The spatial AK model and the Pontryagin maximum principle," Journal of Mathematical Economics, Elsevier, vol. 67(C), pages 87-94.
    5. Ademir Rocha & Cleomar Gomes da Silva & Fernando Perobelli, 2022. "The New Economic Geography and labour emigration: Analysing Venezuela's hyperinflation episode," Journal of International Development, John Wiley & Sons, Ltd., vol. 34(1), pages 175-202, January.
    6. Cho, Cheol-Joo, 2017. "The displacement and attraction effects in interurban migration: An application of the input-output scheme to the case of large cities in Korea," Economics Discussion Papers 2017-49, Kiel Institute for the World Economy (IfW Kiel).
    7. Grafeneder-Weissteiner, Theresa & Kubin, Ingrid & Prettner, Klaus & Prskawetz, Alexia & Wrzaczek, Stefan, 2015. "Coping with inefficiencies in a New Economic Geography model: The unintended consequences of policy interventions," Mathematical Social Sciences, Elsevier, vol. 76(C), pages 146-157.

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    Keywords

    Economic geography; Spatial Dynamics; Migrations; Growth;
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