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Multi-Regional Economic Dynamics with Land Prices and Agglomeration

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  • Wei-Bin Zhang

    (Ritsumeikan Asia Pacific University, Japan)

Abstract

The purpose of this study is to deal with dynamics of space-dependent land values and rents in tandem with interregional agglomeration. The economy consists of any number of regions and each region has two production sectors. Land values, land rents, capital accumulation and regional amenities are endogenous. The economy is built under assumptions of profit maximization, utility maximization, and perfect competition. We show that the dynamics of J region national economy is controlled by J+1 differential equations. We simulate the model and demonstrate the existence of a unique equilibrium point. We conduct comparative dynamic analysis to plot the effects on all the variables due to changes in the total factor productivities, regional amenity parameters, and the propensities to consume industrial goods, to save and to consume housing.

Suggested Citation

  • Wei-Bin Zhang, 2021. "Multi-Regional Economic Dynamics with Land Prices and Agglomeration," Medzinarodne vztahy (Journal of International Relations), Ekonomická univerzita, Fakulta medzinárodných vzťahov, vol. 19(1), pages 63-88.
    • Handle: RePEc:brv:journl:v:19:y:2021:i:1:p:63-88
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    More about this item

    Keywords

    land value; interregional inequality; regional agglomeration; wealth accumulation; amenity;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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