Regional inequality: An analysis under the core–peripheral model

Abstract

Desmet, Gumpert, and Ortίn have analyzed regional development using the Ricardian model or the Heckscher–Ohlin theorem. However, aspects such as consideration of combined wages, substitution elasticities, marginal costs, fixed costs, and number of companies were completely ignored. This study investigates the underdevelopment of regions in light of Krugman`s core–peripheral model. The extension of the model is intended to analyze the aspects that have so far been ignored and their influence on the benefits of the two regions. The following aspects characterize the model. Two regions with two sectors are considered for the model. The regions are characterized by different technological equipment. The first region is industrial. The second region has an agricultural character. When a new technology is available, both regions can benefit under certain conditions. The financial transfers lead to a convergence of wages.

Ricardian model theory under different transfer forms and input factors

“…The individual influencing factors could be integrated and allow calculations of their effects in the chapter on numerical evidence. The influencing factors could also be integrated into Gumpert's model extensions and would provide identical results (Desmet & Ort ın, 2007;Gumpert, 2019aGumpert, , 2019b.…”

“…Authors explain regional development (Desmet & Ort ın, 2007;Gumpert, 2019aGumpert, , 2019b). Desmet and Ort ın focus exclusively on utility levels under a Ricardian model framework.…”

Underdevelopment through Productivity Improvement Measures in an Advanced Region

“…The author uses the core-peripheral model as a basis for this framework (Desmet and Ortίn, 2007;Gumpert, 2019a;Gumpert, 2019b;Krugman, 1991). The regional development model thus consists of two sectors.…”

“…In this paper, the author considers two regions, two sectors, and two products. The assumptions are based on publications: Brezis, Krugman, and Tsiddon (1993), Desmet (2002), Desmet and Ortίn (2007), Gumpert (2019a), Gumpert (2019b), and Krugman (1991).…”