Abstract
ABSTRACTThis paper develops an extension of Krugman’s Core–Periphery (CP) model by considering a competitive primary sector that extracts a renewable natural resource. The dynamics of the resource give rise to a new dispersion force: the resource effect. If primary goods are not tradable, lower trade costs boost dispersion, and the agglomeration–dispersion transition is sudden or smooth depending on the productivity of the primary sector. Cyclic behaviours arise for high levels of productivity in resource extraction. If primary goods are tradable, in most cases, the symmetric equilibrium goes from stable to unstable as the openness of trade increases.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
