EQUILIBRIUM DYNAMICS OF INTERREGIONAL MIGRATION TIMING DECISION IN AGGLOMERATION ECONOMIES

Abstract

We propose a novel long-term migration dynamics that can overcome the equilibrium indeterminacy of Core-Periphery (CP) model a la Krugman (The Quarterly Journal of Economics 106 (1991) 651-667). This goal is achieved by introducing uncertainty of economic environment into CP model with Perfect foresight migration dynamics. We show that an equilibrium path of migration dynamics can be uniquely determined in accordance with each stochastic sample path. We also reveal some properties of long-run outcomes.