Inefficiencies in the geographical operation of labour markets

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Abstract
Curry L. (1985) Inefficiencies in the geographical operation of labour markets, Reg. Studies 19, 203–215. After postulating an efficient overall competitive spatial price equilibrium in labour markets, the real world map of wages and labour flows is introduced as an inefficient form of this configuration because of opportunities not being exploited and wages not being ‘correct’ due to ignorance. Since these markets operate via local information and income flows the employment status of an individual affects that of his neighbours. Depending on the intensity of labour demand and the coupling strength between contiguous pairs on a regular lattice, the economy can break up into polarized patches of different economic climates. Singularities now develop and previously monotonic functions develop flat parts.

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