The core-periphery model by Krugman (1991) has two 'dramatic' implications: catastrophic agglomeration and locational hysteresis. We study this seminal model with CES instead of Cobb-Douglas upper tier preferences. This small generalization suffices to change these stark implications. For a wide...

Following the rationale for regional redistribution programs described in the official documents of the European Union, this paper studies a very simple multi-country model built around two regions: a core and a periphery. Technological spill-overs link firms' productivity in each of the two...

The contending fundamental determinants of growth -- institutions, geography and culture --exhibit far more persistence than do the growth rates they are supposed to explain. So, what exogenous shocks might account for the variance around those persistent fundamentals? The terms of trade seems...

I study a model of the financial sector in which intermediation among debt financed banks gives rise to an endogenous core-periphery network - few highly interconnected and many sparsely connected banks. Endogenous intermediation generates excessive systemic risk in the financial network....

We propose a regional inequality-based mechanism to explain the heterogeneity in the spread of Covid-19 and test it using data from India. We argue that a core-periphery economic structure is likely to increase the spread of infection because it involves movement of goods and people across the...

This paper analyzes subsidies for intracity and intercity commuting in an urban economics framework with two cities and agglomeration externalities, where workers may commute within and between cities. First, commuting subsidies serve to internalize agglomeration externalities: Intracity...

We incorporate the now standard knowledge-capital model of multinational firms in a new economic geography setting. The theoretical predictions of our model suggest that unskilled labor mobility leads to less concentration of production than skilled labor mobility does. This is in line with...

Tax competition for a mobile factor is different in 'new economic geography settings' compared to standard tax competition models. The agglomeration rent which accrues to the mobile factor in the core region can be taxed. Moreover, a tax differential between the core and the periphery can be...

The aim of this paper is to provide a new mechanism for the spatial mismatch hypothesis. Spatial mismatch can here be the result of optimizing behavior on the part of the labor market participants. In particular, the unemployed can choose low amounts of search and long-term unemployment if they...