Economics of Agglomeration: Cities, Industrial Location, and Regional Growth

Half-title......Page 3
Title......Page 5
Copyright......Page 6
Dedication......Page 7
Contents......Page 9
Acknowledgments......Page 13
1.1 INTRODUCTION......Page 15
1.2 CITIES: PAST AND FUTURE......Page 17
1.3.1 Agglomeration and Increasing Returns......Page 19
1.3.2 Agglomeration and Externalities......Page 21
1.3.3 Thünen and Agglomerations......Page 24
1.4 ON THE RELATIONSHIP BETWEEN SPACE AND ECONOMICS......Page 25
1.4.1 Space and the Competitive Paradigm......Page 26
1.4.2 Spatial Competition......Page 28
1.5.1 Part I. Fundamentals of Geographical Economics......Page 29
1.5.2 Part II. The Structure of Metropolitan Areas......Page 31
1.5.3 Part III. Factor Mobility and Industry Location......Page 32
1.5.4 Part IV. Urban Systems and Regional Growth......Page 33
NOTES......Page 34
PART I FUNDAMENTALS OF GEOGRAPHICAL ECONOMICS......Page 37
2.1 INTRODUCTION......Page 39
2.2 THE QUADRATIC ASSIGNMENT PROBLEM......Page 42
2.3 THE SPATIAL IMPOSSIBILITY THEOREM......Page 44
2.3.1 Competitive Equilibrium in a Homogeneous Spatial Economy......Page 45
2.3.2 Examples......Page 51
2.3.3 Corollariesand Extensions......Page 56
2.3.4 Notes on the Literature......Page 59
2.4 THE FIRST WELFARE THEOREM IN A SPATIAL ECONOMY......Page 61
2.5.1 The Simple Plant Location Problem......Page 63
2.6 CONCLUDING REMARKS......Page 70
APPENDIX......Page 71
NOTES......Page 74
3.1 INTRODUCTION......Page 76
3.2.1 The Basic Model......Page 79
3.2.2 Technological Linkages and the Location of Activities......Page 84
3.2.3 The Case of a Neoclassical Technology......Page 90
3.3.1 Residential Equilibrium in the Monocentric City......Page 92
3.3.2 Comparative Statics of the Residential Equilibrium......Page 97
3.3.3 Efficiency of the Residential Equilibrium......Page 98
3.3.4 The Case of Multiple Income Classes......Page 99
3.3.5 Discrete Foundations of Continuous Land Use Models......Page 101
3.3.6 Notes on the Literature......Page 103
3.4 CONCLUDING REMARKS......Page 104
NOTES......Page 105
4.1 INTRODUCTION......Page 107
4.2 MICROFOUNDATIONS OF INCREASING RETURNS AT THE CITY LEVEL......Page 112
4.2.1 A Chamberlinian Approach: The Diversity of Intermediate Inputs......Page 113
4.2.2 A Smith–Marshallian Approach: The Matching Process on the Labor Market......Page 117
4.3.1 The City as a Firm......Page 120
4.3.2 The City as a Community......Page 125
4.3.3 System of Cities: A Simple Framework......Page 127
4.4.1 Specialization and Trade......Page 129
4.5 COMPETITION AND THE SPATIAL ORGANIZATION OF MARKETS......Page 133
4.5.1 Equilibrium and the Number of Firms in Space......Page 134
4.5.2 The Optimum Spatial Distribution of Firms......Page 137
4.5.3 Land Capitalization......Page 138
4.5.4 Notes on the Literature......Page 141
4.6 CONCLUDING REMARKS......Page 142
NOTES......Page 144
5.1 INTRODUCTION......Page 147
5.2 THE CITY AS A PUBLIC GOOD......Page 150
5.2.1 The Henry George Theorem......Page 152
5.2.2 The Centralized Provision of a Local Public Good......Page 154
5.2.3 The Supply of Local Public Goods by Land Developers......Page 158
5.2.4 The Case of a Congestible Public Good......Page 160
5.2.5 Potential Limits of Land Capitalization......Page 161
5.3 THE NUMBER AND SIZE OF CITIES UNDER POLITICS......Page 163
5.3.1 The Political Economics of Community Formation......Page 164
5.3.2 Is There an Oversupply of Public Facilities?......Page 168
5.3.3 The Role of Land Capitalization......Page 170
5.3.4 Notes on the Literature......Page 172
5.4 CONCLUDING REMARKS......Page 173
APPENDIX......Page 174
NOTES......Page 179
PART II THE STRUCTURE OF METROPOLITAN AREAS......Page 181
6.1 INTRODUCTION......Page 183
6.2.1 Social Externalities between Individuals......Page 188
6.2.2 The CBD as the Outcome of Interaction between Firms......Page 196
6.3.1 The Model......Page 199
6.3.2 Equilibrium......Page 202
6.4 THE MONOCENTRIC CITY......Page 205
6.5 THE POLYCENTRIC CITY......Page 215
6.6 SUBURBANIZATION AND THE LOCATION OF MULTIUNIT FIRMS......Page 223
6.7 CONCLUDING REMARKS......Page 224
APPENDIX......Page 225
NOTES......Page 229
7.1 INTRODUCTION......Page 231
7.2 MONOPOLISTIC COMPETITION AND THE FORMATION OF SHOPPING DISTRICTS......Page 235
7.2.1 Spatial Equilibrium......Page 237
7.2.2 The Efficiency of the Spatial Equilibrium......Page 243
7.3.1 Spatial Competition under Preference for Variety......Page 246
7.3.2 The Efficiency of the Agglomeration of Firms......Page 254
7.3.3 Shipping Goods and Agglomeration......Page 256
7.4 CONSUMERS' SEARCH AND THE CLUSTERING OF SHOPS......Page 257
7.5.1 Monopolistic Competition on Markets for Intermediate Goods......Page 262
7.5.2 Formation of Secondary Employment Centers......Page 266
7.6 CONCLUDING REMARKS......Page 272
APPENDIX......Page 273
NOTES......Page 276
PART III FACTOR MOBILITY AND INDUSTRIAL LOCATION......Page 279
8.1 INTRODUCTION......Page 281
8.2 FACTOR MOBILITY AND AGGLOMERATION ECONOMIES......Page 284
8.2.1 Migrants as Labor Suppliers......Page 286
8.2.2 Migrants as Labor Suppliers and Amenity Consumers......Page 289
8.3 OLIGOPOLY, LOCALIZATION ECONOMIES, AND REGIONAL ADVANTAGE......Page 292
8.3.1 Interregional Price Competition......Page 294
8.3.2 Spatial Equilibrium......Page 296
8.3.3 Welfare......Page 297
8.4 THE FORMATION OF INDUSTRIAL CLUSTERS UNDER LOCALIZATION ECONOMIES......Page 300
8.4.1 Equilibrium Pricing......Page 302
8.4.2 Spatial Equilibrium......Page 304
8.4.3 Welfare......Page 308
8.5 CONCLUDING REMARKS......Page 312
APPENDIX......Page 313
NOTES......Page 315
9.1 INTRODUCTION......Page 317
9.2.1 The Framework......Page 321
9.2.2 The Two-Region Case......Page 327
9.2.3 The Core–Periphery Structure......Page 328
9.2.4 The Symmetric Structure......Page 331
9.2.5 A Model of the Modern Sector with Two Factors......Page 332
9.3.1 The Framework......Page 335
9.3.2 Agglomeration of the Intermediate and Final Sectors......Page 337
9.4 A LINEAR MODEL OF CORE–PERIPHERY: DISCRIMINATORY PRICING AND WELFARE......Page 341
9.4.1 Equilibrium Prices......Page 342
9.4.2 Agglomeration versus Dispersion......Page 344
9.4.3 A Diagrammatic Analysis......Page 346
9.4.4 A Welfare Analysis of the Core–Periphery Structure......Page 348
9.5 ON THE IMPACT OF FORWARD-LOOKING BEHAVIOR......Page 352
9.6 CONCLUDING REMARKS......Page 357
APPENDIX......Page 359
NOTES......Page 360
PART IV URBAN SYSTEMS AND REGIONAL GROWTH......Page 363
10.1 INTRODUCTION......Page 365
10.2.2 The Formation of a Monocentric Economy......Page 369
10.2.2.1 Equilibrium Prices......Page 370
10.2.2.2 Sustainability of the Monocentric Configuration......Page 372
10.2.3 Welfare in the Monocentric Economy......Page 377
10.3 CITY FORMATION WITH INTERMEDIATE COMMODITIES......Page 379
10.3.1 The framework......Page 380
10.3.2.1 Equilibrium......Page 383
10.3.2.2 Welfare......Page 387
10.3.3.1 Equilibrium......Page 388
10.3.3.2 Welfare......Page 392
10.4 ON THE EMERGENCE AND STRUCTURE OF URBAN SYSTEMS......Page 393
10.4.1 The Adjustment Process......Page 394
10.4.2 The Urban System as a Network of Cities......Page 396
10.5 CONCLUDING REMARKS......Page 398
APPENDIX......Page 400
NOTES......Page 401
11.1 INTRODUCTION......Page 402
11.2.1 The Model......Page 406
11.2.2 The R&D Sector......Page 411
11.2.3 Migration Behavior......Page 414
11.3.1 The Market Outcome......Page 415
11.3.1.1 The ss-Growth Path When λ Is Fixed......Page 416
11.3.1.2 The ss-Growth Path When Migration Is Allowed......Page 419
11.3.2 Should We Mind the Gap?......Page 423
11.4 AGGLOMERATION AND GROWTH IN THE PRESENCE OF BARRIERS THAT PREVENT INNOVATION TRANSFER......Page 426
11.4.1 The Market Outcome......Page 427
11.4.1.1 ss-Growth Path When λ Is Fixed......Page 428
11.4.1.2 The ss-Growth Path When Migration Is Allowed......Page 429
11.5 CONCLUDING REMARKS......Page 435
APPENDIX......Page 436
NOTES......Page 445
Name Index......Page 447
References......Page 453
Subject Index......Page 473