2006
DOI: 10.1016/j.jebo.2004.05.006
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Chaos in the core-periphery model

Abstract: This paper shows that the standard continuous-time core-periphery model (the foundation of the New Economic Geography) is not robust; simply reformulating it in discrete time has profound implications. The continuous-time model can only exhibit stationary long-term behavior, and high transport costs are perceived as stabilizing. In contrast, the discrete-time model can exhibit cycles of any periodicity or chaotic behavior, and high transport costs are de-stabilizing. Furthermore, the sensitive dependence of lo… Show more

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Cited by 24 publications
(22 citation statements)
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“…We consider the slightly different assumptions of Fujita et al (1999) as used in the discrete version proposed by Currie & Kubin (2006). Below is a very short description of the model which should suffice for readers familiar with the literature.…”
Section: The Core-periphery Model: a Brief Descriptionmentioning
confidence: 99%
See 3 more Smart Citations
“…We consider the slightly different assumptions of Fujita et al (1999) as used in the discrete version proposed by Currie & Kubin (2006). Below is a very short description of the model which should suffice for readers familiar with the literature.…”
Section: The Core-periphery Model: a Brief Descriptionmentioning
confidence: 99%
“…To the best of our knowledge, Currie & Kubin (2006) 1 provide the first discretetime version of the core-periphery model. The dramatic appearance of chaos in this model explains, perhaps, the fact that no developments by other authors succeeded this first attempt at discretisation.…”
Section: Introductionmentioning
confidence: 99%
See 2 more Smart Citations
“…3 See for an exploration of the Footloose Capital Model without taxation; and Currie and Kubin (2006) for a more general exploration of the implications of specifying models of the new Economic Geography in discrete time.…”
Section: Introductionmentioning
confidence: 99%