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Advisor(s)
Abstract(s)
We introduce heterogeneous preferences for location in 2-region core-periphery models, thereby generating an additional dispersive force: the home-sweet-home effect. Different forms of heterogeneity in preferences for location induce different long-run spatial distributions of economic activity, depending on the short-run equilibrium model and the distribution of preferences for location that are considered. Our analysis highlights the importance of the convexity/concavity properties of utility from consumption and utility from location, as functions of the spatial distribution of economic activity.
Description
Keywords
New economic geography Core-periphery model Heterogeneous agents Preferences for location
Citation
Castro, S.B.S.D., Correia-da-Silva, J., Gaspar, J.M. (2021). Economic geography meets Hotelling: the home-sweet-home effect. Economic Theory
Publisher
Springer