NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Self-Defeating Regional Concentration

Kiminori Matsuyama, Takaaki Takahashi

NBER Working Paper No. 4484
Issued in October 1993
NBER Program(s):   ITI

We present a simple model of a two-region economy in which undesirable concentration may occur. With freedom to choose where to live, individuals in this economy concentrate into one region in their pursuit of better life, and end up becoming worse off. We characterize the conditions under which such self-defeating concentration occurs in terms of a few key parameters, such as economies of scale in nontradeable service sectors, regional differences in labor productivity in tradeable goods sectors, and substitutability of tradeable goods in consumption.

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Document Object Identifier (DOI): 10.3386/w4484

Published: Matsuyama, Kiminori & Takahashi, Takaaki, 1998. "Self-Defeating Regional Concentration," Review of Economic Studies, Blackwell Publishing, vol. 65(2), pages 211-34, April. citation courtesy of

 
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