Perfect competition in a continuous spatial economy

✍ Scribed by Pascal Mossay

• Book ID: 104363301
• Publisher: Elsevier Science
• Year: 2003
• Tongue: English
• Weight: 89 KB
• Volume: 18
• Category: Article
• ISSN: 0960-0779
• DOI: 10.1016/s0960-0779(02)00668-9

✦ Synopsis

We present a model of spatial adjustments of economic agents across perfectly competitive locations distributed along a continuous geographical space. The evolution of the spatial economy is governed by a set of partial differential equations. We perform a local stability analysis around the uniform steady-state by using the method of normal modes. Examples are presented for the case of two consumer types and two local goods. The spatial stability of the uniform steady-state depends crucially on whether the law of demand holds.