https://github.com/kubohiroya/racetrack-economy-model

A recreation of the Krugman simulation.
https://github.com/kubohiroya/racetrack-economy-model

economic-model economic-modelling economics simulator spatial-economics

Last synced: 16 days ago
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A recreation of the Krugman simulation.

• Host: GitHub
• URL: https://github.com/kubohiroya/racetrack-economy-model
• Owner: kubohiroya
• License: mit
• Created: 2023-01-06T16:57:56.000Z (about 2 years ago)
• Default Branch: master
• Last Pushed: 2024-07-13T01:44:03.000Z (7 months ago)
• Last Synced: 2024-07-13T02:39:33.864Z (7 months ago)
• Topics: economic-model, economic-modelling, economics, simulator, spatial-economics
• Language: TypeScript
• Homepage:
• Size: 1.26 MB
• Stars: 2
• Watchers: 2
• Forks: 0
• Open Issues: 1
• Metadata Files:
  • Readme: README.md
  • License: LICENSE.txt

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README

        
# The Economic Geography Modeling Simulator

## The Racetrack Economy

https://kubohiroya.github.io/racetrack-economy-model

https://user-images.githubusercontent.com/1578247/214999618-4f7118dd-e70d-4267-a509-76647d1258ad.mov

A recreation of the Krugman simulation.

### The Model

Paul Krugman, the 2008 winner of the Nobel Prize in Economics, 

conducted a simulation using a spatial economics model called 

the "Racetrack Economy" model. 

This model hypothesizes several locations (in Krugman's case, 12 cities) arranged 

at equal intervals in a circular fashion, like the numbers on a clock face. 

The economy includes farmers, who live in the locations and do not move, 

and factory workers, who move between the locations in search of higher wages and 

lower prices. 

Initially, the populations of the locations are only slightly different

(a uniformly equal location size causes equilibrium, which prevents the simulation 

from working). 

Using these basic conditions, Krugman modified transportation 

cost (τ) and the degree of love of variety for industrial products (σ) in order to

analyze changes in the numbers and locations of agglomerations.

### Variables

- K: The number of locations assumed to be laid out symmetrically in a circle, with transportation

                possible only around the circumference. The distance between any two neighboring locations is set equal

                to one.

- π: The share of manufacturing goods in expenditure.

- τ: The level of transportation cost among locations. A value of 1 represents no transportation cost,

                while a value of 10 represents significant transportation cost.

- σ: The elasticity of substitution among manufactured goods. A value of 1 represents a strong love of

                variety, while a value of 20 represents a limited love of variety.

Variables "Κ", "π", "T" and "σ" can be changed while the simulation is in progress.

This allows the observation of agglomeration formation, agglomeration dispersal, and changes in the numbers and locations of agglomerations according to various parameters.

### Simulator

The simulator is hosted on GitHub Pages: https://kubohiroya.github.io/racetrack-economy-model

- The x-axis corresponds to locations. As Krugman's simulation is configured circumferentially,

  the locations on the far left and right should be considered to be connected.

- The y-axis shows the industrial production share of each location in the simulation world. A location with a high y-axis value has "agglomeration" of industrial production.

- The "Start" button starts and "Stop" button stops the simulation.

- The "Reset" button resets the simulation.

### Building your own bundle

  yarn install && yarn build

## The Graph Structured Economy Model

## References

* Krugman, P. (1993) On the number and location of cities. European Economic Review, Vol. 37 (2-3)

pp.293-298.

* Fujita, M., Krugman, P., Venables, A. (1999) "The Spatial Economy: Cities, Regions, and International

Trade", MIT Press.