Spatial stability
Année de publication: 2004
Número: 47
Type: Working Paper
Résumé
We consider a continuous spatial economy consisting of pure exchange local economies. Agents are allowed to change their location over time as a response to spatial utility differentials. These spatial adjustments toward higher utility neighborhoods lead the spatial economy to converge to a spatially uniform allocation of resources, provided that the matrix of price effects is quasi-negative definite. Furthermore our model provides a real time interpretation of the tâtonnement story. Also, spatial fluctuations are shown to be damped at different rates according to their spatial scale.