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

Fig. 3

From fig. 3 the following relations are evident:
φ^u break < φ self-selection < φ^u sustain <φ^s break < φ^s sustain
there exist therefore a range of trade costs for which a self-selecting equilibrium is possible (φ
self-selection < φ < φ^s sustain) and another smaller range for which is the only stable
equilibrium (φ^u sustain < φ < φ^s break).

The critical values considered depend on the parameters of the model. All the threshold
values are increasing in μ. If the share of manufactures in the economy is large, the

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