Abstract
We study global dynamics of the New Economic Geography model which describes spatial distribution of industrial activity in the long run across three identical regions depending on the balancing of agglomeration and dispersion forces. It is defined by a two-dimensional piecewise smooth map depending on four parameters. Based on the numerical evidence we discuss typical bifurcation scenarios observed in the model: starting from the symmetric fixed point (related to equal distribution of the industrial activity in all the three regions) two different scenarios are realized depending on whether the transportation cost parameter is increased or decreased. Emergence of the Wada basins of coexisting attractors leading to the so-called final state sensitivity is discussed, as well as final bifurcation of the chaotic attractor.
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