The purpose of the present study is to analyse non-monotonic spatial changes accompanying economic development. A dynamic two-region model with endogenous human capital and converging processes to its long-run equilibria is investigated. The main focus of the present study is to investigate how the level of migration cost influences the shape of a converging process. From the analysis of the model, population distribution draws an inverted-U-curve to describe economic development when the cost of migration is low enough. Also, the transition of interregional income inequalities is an inverted-U when migration cost is at an intermediate level.
ASJC Scopus subject areas
- Economics and Econometrics