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

by Masahisa Fujita , Jacques-Francois Thisse

• ISBN13: 9780521801386
• ISBN10: 0521801389
• Format: Hardcover
• Copyright: 2002-05-06
• Publisher: Cambridge University Press

Summary

This book provides the first unifying treatment of the range of economic reasons for the clustering of firms and households. Its goal is to explain further the trade-off between various forms of increasing returns and different types of mobility costs. Although referring to agglomeration as a generic term is convenient, it should be noted that the concept of economic agglomeration refers to distinct real world situations. The main focus of the treatment is on cities, but it also explores the formation of agglomerations, such as commercial districts within cities, industrial clusters at the regional level, and the existence of imbalance between regions. The book is rooted within the realm of modern economics and borrows concepts from geography and regional science, which makes it accessible to a broad audience formed by economists, geographers, regional planners, and other scientists. It may be used in coursework for graduate students and upper-level undergraduates.

Table of Contents

Acknowledgments	xi
Agglomeration and Economic Theory	1	(24)
Introduction	1	(2)
Cities: Past and Future	3	(2)
Why Do We Observe Agglomerations?	5	(6)
On the Relationship between Space and Economics	11	(4)
Plan of the Book	15	(10)
PART I. FUNDAMENTALS OF GEOGRAPHICAL ECONOMICS
The Breakdown of the Price Mechanism in a Spatial Economy	25	(37)
Introduction	25	(3)
The Quadratic Assignment Problem	28	(2)
The Spatial Impossibility Theorem	30	(17)
The First Welfare Theorem in a Spatial Economy	47	(2)
Considerations on the Second Welfare Theorem in a Spatial Economy	49	(7)
Concluding Remarks	56	(6)
The Thunen Model and Land Rent Formation	62	(31)
Introduction	62	(3)
The Location of Divisible Activities	65	(13)
The Urban Land Rent	78	(12)
Concluding Remarks	90	(3)
Increasing Returns and Transport Costs: The Fundamental Trade-Off of a Spatial Economy	93	(40)
Introduction	93	(5)
Microfoundations of Increasing Returns at the City Level	98	(8)
City Size under Scale Economies	106	(9)
Trade in a System of Cities	115	(4)
Competition and the Spatial Organization of Markets	119	(9)
Concluding Remarks	128	(5)
Cities and the Public Sector	133	(36)
Introduction	133	(3)
The City as a Public Good	136	(13)
The Number and Size of Cities under Politics	149	(10)
Concluding Remarks	159	(10)
Appendix	160	(9)
PART II. THE STRUCTURE OF METROPOLITAN AREAS
The Spatial Structure of Cities under Communications Externalities	169	(48)
Introduction	169	(5)
Agglomeration as Spatial Interaction among Individuals or Firms	174	(11)
The City as Spatial Interdependence between Firms and Workers	185	(6)
The Monocentric City	191	(10)
The Polycentric City	201	(8)
Suburbanization and the Location of Multiunit Firms	209	(1)
Concluding Remarks	210	(7)
Appendix	211	(6)
The Formation of Urban Centers under Imperfect Competition	217	(50)
Introduction	217	(4)
Monopolistic Competition and the Formation of Shopping Districts	221	(11)
Oligopolistic Competition and the Agglomeration of Retailers	232	(11)
Consumers' Search and the Clustering of Shops	243	(5)
The Formation of Urban Employment Centers	248	(10)
Concluding Remarks	258	(9)
Appendix	259	(8)
PART III. FACTOR MOBILITY AND INDUSTRIAL LOCATION
Industrial Agglomeration under Marshallian Externalities	267	(36)
Introduction	267	(3)
Factor Mobility and Agglomeration Economies	270	(8)
Oligopoly, Localization Economies, and Regional Advantage	278	(8)
The Formation of Industrial Clusters under Localization Economies	286	(12)
Concluding Remarks	298	(5)
Appendix	299	(4)
Industrial Agglomeration under Monopolistic Competition	303	(48)
Introduction	303	(4)
The Core-Periphery Model	307	(14)
Sticky Labor and Regional Specialization	321	(6)
A Linear Model of Core-Periphery: Discriminatory Pricing and Welfare	327	(11)
On the Impact of Forward-Looking Behavior	338	(5)
Concluding Remarks	343	(8)
Appendix	345	(6)
PART IV. URBAN SYSTEMS AND REGIONAL GROWTH
Back to Thunen: The Formation of Cities in a Spatial Economy	351	(37)
Introduction	351	(4)
City Formation under Preference for Variety	355	(10)
City Formation with Intermediate Commodities	365	(14)
On the Emergence and Structure of Urban Systems	379	(5)
Concluding Remarks	384	(4)
Appendix	386	(2)
On the Relationship between Agglomeration and Growth	388	(45)
Introduction	388	(4)
A Model of Agglomeration and Growth	392	(9)
Agglomeration and Growth When Production is Footloose	401	(11)
Agglomeration and Growth in the Presence of Barriers that Prevent Innovation Transfer	412	(9)
Concluding Remarks	421	(12)
Appendix	422	(11)
References	433	(20)
Name Index	453	(6)
Subject Index	459