Regional Intergration and Migration: An Economic Geography Model with Hetergenous Labour Force



where n is the number of varieties produced, mi consumption of each variety and ρ a
parameter representing the intensity of the “love for variety” in the manufacturing sector. The
constant elasticity of substitution between any two varieties is
σ1/ (1 - ρ), (σ >1).

The consumers maximize (1) subject to the following budget constraint:

n

PAA + Σ mP = Y
1

where Y is income and Pa, Pi respectively the prices of the homogeneous product and prices
for each variety of the manufacturing aggregate.

A two stage budgeting procedure can be applied. The first step in the consumer’s problem is
to choose each
mi in order to minimise the cost of attaining a given M:

σ

n

÷  σ-1

m σ


σ-1


min pimi s.t. M =

1

-1/σ

-, p-          , l,

=τπ- = —  therefore

j   Pj


m m m .....mi

the first-order conditions. imply —-
mj

( P-
t p


mj


and by substitution of this last equation in the budget constraint we obtain:

n   n

p


ʌɪ-ɑ


σ-1
mj ~σ~


σ

σ-1

which implies:


10




More intriguing information

1. Output Effects of Agri-environmental Programs of the EU
2. QUEST II. A Multi-Country Business Cycle and Growth Model
3. The name is absent
4. PEER-REVIEWED FINAL EDITED VERSION OF ARTICLE PRIOR TO PUBLICATION
5. The name is absent
6. Beyond Networks? A brief response to ‘Which networks matter in education governance?’
7. The name is absent
8. The name is absent
9. Mortality study of 18 000 patients treated with omeprazole
10. The Impact of EU Accession in Romania: An Analysis of Regional Development Policy Effects by a Multiregional I-O Model
11. SLA RESEARCH ON SELF-DIRECTION: THEORETICAL AND PRACTICAL ISSUES
12. The Shepherd Sinfonia
13. Bird’s Eye View to Indonesian Mass Conflict Revisiting the Fact of Self-Organized Criticality
14. Stakeholder Activism, Managerial Entrenchment, and the Congruence of Interests between Shareholders and Stakeholders
15. Implementation of Rule Based Algorithm for Sandhi-Vicheda Of Compound Hindi Words
16. Synchronisation and Differentiation: Two Stages of Coordinative Structure
17. Biological Control of Giant Reed (Arundo donax): Economic Aspects
18. The name is absent
19. The name is absent
20. The Evolution