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Theories of systems of cities

In: Handbook of Regional and Urban Economics

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Author Info
Abdel-Rahman, Hesham M.
Anas, Alex

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Abstract

Economic theories of systems of cities explain why production and consumption activities are concentrated in a number of urban areas of different sizes and industrial composition rather than uniformly distributed in space. These theories have been successively influenced by four paradigms: (i) conventional urban economics emphasizing the tension between economies due to the spatial concentration of activity and diseconomies arising from that concentration; (ii) the theory of industrial organization as it relates to inter-industry linkages and to product differentiation; (iii) the New Economic Geography which ignores land markets but emphasizes trade among cities, fixed agricultural hinterlands and the endogenous emergence of geography; (iv) the theory of endogenous economic growth. Among the issues examined are specialization versus diversification of cities in systems of cities, how city systems contribute to increasing returns in national and the global economies, the factors that determine skill distribution and income disparity between cities, the impacts of income disparity on welfare, whether population growth should cause economic activity to become more or less concentrated in urban areas, and how resources should be allocated efficiently in a system of cities. Related to the last issue, we consider models where cities are organized by local planners or developers as well as cities that self-organize by atomistic actions. A conclusion of the theoretical study of city systems is that markets fail in efficiently allocating resources across cities when certain intercity interactions are present and that a role for central planning may be necessary.

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This chapter was published in: J. V. Henderson & J. F. Thisse (ed.) Handbook of Regional and Urban Economics, , chapter 52, pages 2293-2339, 2004.

This item is provided by Elsevier in its series Handbook of Regional and Urban Economics with number 4-52.

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This chapter was published in the following book, which is listed on IDEAS:
J. V. Henderson & J. F. Thisse (ed.), 2004. "Handbook of Regional and Urban Economics," Handbook of Regional and Urban Economics, Elsevier, edition 1, volume 4, number 4, September. [Downloadable!] (restricted)
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R1 - Urban, Rural, and Regional Economics - - General Regional Economics

References listed on IDEAS
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Anthony J. Venables, 2003. "Spatial Disparities in Developing Countries: Cities, Regions and International Trade," CEP Discussion Papers dp0593, Centre for Economic Performance, LSE. [Downloadable!]
    Other versions:
  2. Jean Cavailhes & Carl Gaigne & Takatoshi Tabuchi & Jacques-Francois Thisse, 2006. "Trade and the structure of cities," CIRJE F-Series CIRJE-F-454, CIRJE, Faculty of Economics, University of Tokyo. [Downloadable!]
    Other versions:
  3. Matthias Wrede, 2009. "Agglomeration, tax competition, and fiscal equalization," Working Papers 2009/5, Institut d'Economia de Barcelona (IEB). [Downloadable!]
    Other versions:
  4. Cuberes, David, 2008. "A Model of Sequential City Growth," MPRA Paper 8431, University Library of Munich, Germany. [Downloadable!]
  5. Abdel-Rahman, Hesham M., 2003. "The city network paradigm: new frontiers," Working Papers 2003-10, University of New Orleans, Department of Economics and Finance. [Downloadable!]
  6. Yuri Yegorov & Oscar Mascarilla-i-Miro, 2005. "Spatial Aglomeration of Firms - Theory and Application for Industrial District 22@ of Barcelona," ERSA conference papers ersa05p501, European Regional Science Association. [Downloadable!]
  7. J. Vernon Henderson & Anthony Venables, 2008. "The Dynamics of City Formation," NBER Working Papers 13769, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  8. Vernon Henderson & Anthony Venables, 2009. "Dynamics of city formation," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(2), pages 233-254, April. [Downloadable!] (restricted)
  9. Rainald Borck & Matthias Wrede, 2008. "Subsidies for Intracity and Intercity Commuting," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  10. Chung-Yi Tse, 2008. "Learning investment and industrial diversity in urban growth," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(2), pages 413-433, April. [Downloadable!] (restricted)
  11. Overman, Henry G. & Rice, Patricia & Venables, Anthony J., 2008. "Economic Linkages Across Space," CEPR Discussion Papers 6786, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
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