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General Geographical Economics Model with Congestion

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  • Charles van Marrewijk

    ()
    (Faculty of Economics, Erasmus Universiteit Rotterdam)

Abstract

We derive and discuss a general, but simple geographical economics model with congestion, allowing us to explain the economic viability of small and large locations. The model generalizes some previous work and lends itself to analyzing the impact of public policy in terms of infrastructure changes. We show analytically that scale effects (total size of the economy) and changes in the cost structure (fixed and marginal costs) are important from a welfare perspective, but largely irrelevant from an economic dynamics perspective.

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File URL: http://papers.tinbergen.nl/05100.pdf
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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 05-100/2.

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Date of creation: 31 Oct 2005
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Handle: RePEc:dgr:uvatin:20050100

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Web page: http://www.tinbergen.nl

Related research

Keywords: Geographical economics; congestion; externalities;

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  1. Baldwin, Richard & Krugman, Paul, 2000. "Agglomeration, Integration and Tax Harmonization," CEPR Discussion Papers 2630, C.E.P.R. Discussion Papers.
  2. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, December.
  3. J.Peter Neary, 2001. "Of Hype and Hyperbolas: Introducing the New Economic Geography," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 536-561, June.
  4. Krugman, Paul & Venables, Anthony J., 1995. "Globalization and the Inequality of Nations," Working Paper Series 430, Research Institute of Industrial Economics.
  5. 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.
  6. Rikard Forslid & Gianmarco I.P. Ottaviano, 2003. "An analytically solvable core-periphery model," Journal of Economic Geography, Oxford University Press, vol. 3(3), pages 229-240, July.
  7. Fredrik Andersson & Rikard Forslid, 2000. "Tax Competition and Economic Geography," Econometric Society World Congress 2000 Contributed Papers 1356, Econometric Society.
  8. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
  9. repec:fth:iniesr:430 is not listed on IDEAS
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