Non-negativity and agglomeration behaviour of the quasi-linear logarithmic model of NEG
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It is shown that negative consumption of agricultural goods can occur in the literature using the quasi-linear logarithmic NEG model initially developed in Pflüger (Reg. Sci. Urban Econ. 34:565–573, 2004). This is because the positive consumption condition stated in the original framework is not implemented. Satisfying this condition requires a constraint on the relative size of two of the core model parameters. Importantly, this is found to modify the agglomeration behaviour of the model which affects the results of the original framework and those of ensuing contributions.
KeywordsAgglomeration New economic geography Quasi-linear utility
JEL ClassificationD11 R12 F12
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