Leite, Vasco; Castro, Sofia; Correia-da-Silva, João - In: The Annals of Regional Science 50 (2013) 1, pp. 71-108
We extend an analytically solvable core-periphery model by introducing a monopolistically competitive sector of non-tradable goods that is mobile across regions. We find that when the elasticity of substitution among non-tradable goods is very low, there is agglomeration of all the production...