Increasing Returns and Economic Geography.¶
Krugman, P. (1991). Increasing Returns and Economic Geography. Journal of Political Economy, 99(3), 483-499.
Cited by¶
5 citations across 5 artifacts.
Each citation links to the sentence it supports in the citing article.
Primes¶
- Coordination Problem and Equilibrium Selection
- The equilibrium persists not because it is objectively best but because it was first and is now locked in by the sunk cost, a "history versus expectations" dynamic Krugman (1991) formalized for spatial economic systems with increasing returns.
This sourceFormal core-periphery model in which agglomeration and urban concentration emerge from increasing returns at the geographic scale; supports the 'history versus expectations' framing of spatial lock-in.
Supported in partVerified against the work's full text
Krugman's model shows self-reinforcing agglomeration that depends sensitively on initial conditions, but it does not formalize a 'history versus expectations' dynamic or sunk-cost lock-in; it defers expectations to Krugman 1989.
“circular causation sets in: the more manufacturing is located in one region, the larger that region's share of demand, and this provides an incentive to locate still more manufacturing there.”
- The equilibrium persists not because it is objectively best but because it was first and is now locked in by the sunk cost, a "history versus expectations" dynamic Krugman (1991) formalized for spatial economic systems with increasing returns.
- Economies of Scale
This sourceCore-periphery model deriving agglomeration from scale economies and transport costs.
- Gains from Trade
- - T3: Static Comparative Advantage vs Dynamic Learning and Industrial Policy. (Krugman (1991) extended new-trade-theory mechanisms (Krugman 1979) to show how scale economies, learning curves, and geography make comparative advantage endogenous over time.)
This sourceCore-periphery model in which scale economies, learning, and geography make industrial location (and thus comparative advantage) endogenous; supports the T3 claim that comparative advantage is dynamic and can be shaped by investment/learning curves over time.
Supported in partVerified against the work's full text
Krugman shows scale economies, transport costs and circular causation make industrial location history-dependent; the text never mentions learning curves or comparative advantage becoming endogenous.
“the more manufacturing is located in one region, the larger that region's share of demand, and this provides an incentive to locate still more manufacturing there.”
- - T3: Static Comparative Advantage vs Dynamic Learning and Industrial Policy. (Krugman (1991) extended new-trade-theory mechanisms (Krugman 1979) to show how scale economies, learning curves, and geography make comparative advantage endogenous over time.)
- Increasing Returns
- Self-Fulfilling Prophecy
Verification¶
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