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A Simple Model of Economic Geography à la Helpman-Tabuchi

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Murata, Yasusada
Thisse, Jacques-François

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Abstract

This paper explores the interplay between commodities’ transportation costs and workers’ commuting costs within a general equilibrium framework à la Dixit-Stiglitz. Workers are mobile and choose a region to work in as well as an intra-urban location in which to live. We show that a more integrated economy need not be more agglomerated. Instead, low transportation costs lead to the dispersion of economic activities. This is because workers are able to alleviate the burden of urban costs by being dispersed, while retaining a good access to all varieties. By contrast, low commuting costs foster the agglomeration of economic activities.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4936.

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Date of creation: Feb 2005
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Handle: RePEc:cpr:ceprdp:4936

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Related research
Keywords: agglomeration commuting costs economic geography transportation costs urban costs

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Find related papers by JEL classification:
F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
R12 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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References listed on IDEAS
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. G Duranton & D Puga, 2000. "Nursery Cities: Urban Diversity, Process Innovation and the Life-Cycle of Products," CEP Discussion Papers 0445, Centre for Economic Performance, LSE. [Downloadable!]
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  2. Gianmarco I.P. Ottaviano & Frédéric Robert-Nicoud, 2006. "The 'genome' of NEG models with vertical linkages: a positive and normative synthesis," Journal of Economic Geography, Oxford University Press, vol. 6(2), pages 113-139, April. [Downloadable!] (restricted)
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  3. Alex Anas, 2003. "Vanishing Cities: What Does the New Economic Geography Imply About the Efficiency of Urbanization?," Urban/Regional 0302005, EconWPA. [Downloadable!]
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  4. Gianmarco Ottaviano & Takatoshi Tabuchi & Jacques-FranÁois Thisse, 2002. "Agglomeration and Trade Revisited," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(2), pages 409-436, May. [Downloadable!] (restricted)
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  5. Krugman, Paul & Elizondo, Raul Livas, 1996. "Trade policy and the Third World metropolis," Journal of Development Economics, Elsevier, vol. 49(1), pages 137-150, April. [Downloadable!] (restricted)
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  6. Tabuchi, Takatoshi, 1998. "Urban Agglomeration and Dispersion: A Synthesis of Alonso and Krugman," Journal of Urban Economics, Elsevier, vol. 44(3), pages 333-351, November. [Downloadable!] (restricted)
  7. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June. [Downloadable!] (restricted)
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  8. Takatoshi Tabuchi & Jacques-François Thisse, 2006. "Regional Specialization, Urban Hierarchy, And Commuting Costs," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(4), pages 1295-1317, November. [Downloadable!] (restricted)
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  9. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June. [Downloadable!] (restricted)
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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. Robert-Nicoud, Frédéric, 2006. "Off-Shoring of Business Services and Deindustrialization: Threat or Opportunity - and for Whom?," CEPR Discussion Papers 5617, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  2. Olga Alonso-Villar, 2006. "A Reflection On The Effects Of Transport Costs Within The New Economic Geography," Working Papers 57, ECINEQ, Society for the Study of Economic Inequality. [Downloadable!]
  3. Candau, Fabien, 2006. "Good Governance, Trade and Agglomeration," MPRA Paper 2353, University Library of Munich, Germany. [Downloadable!]
  4. Candau Fabien, 2005. "Lumpy World and Race to the Bottom," International Trade 0508008, EconWPA, revised 01 Feb 2006. [Downloadable!]
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