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How polycentric is a monocentric city? The role of agglomeration economies

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  • Ahlfeldt, Gabriel M.
  • Wendland, Nicolai

Abstract

Can the demise of the monocentric economy across cities during the 20th century be explained by decreasing transport costs to the city center or are other fundamental forces at work? Taking a hybrid perspective of classical bid-rent theory and a world where clustering of economic activity is driven by (knowledge) spillovers, Berlin, Germany, from 1890 to 1936 serves as a case in point. We assess the extent to which firms in an environment of decreasing transport costs and industrial transformation face a trade-off between distance to the CBD and land rents and how agglomeration economies come into play in shaping their location decisions. Our results suggest that an observable flattening of the traditional distance to the CBD gradient may mask the emergence of significant agglomeration economies, especially within predominantly service-based inner city districts.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 24078.

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Date of creation: Jul 2010
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Handle: RePEc:pra:mprapa:24078

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Keywords: Transport Innovations; Land Values; Location Productivity; Agglomeration Economies; Economic History; Berlin;

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Cited by:
  1. Gabriel M. Ahlfeldt & Arne Feddersen, 2010. "From periphery to core: economic adjustments to high speed rail," Working Papers 2010/38, Institut d'Economia de Barcelona (IEB).
  2. Gabriel Ahlfeldt, 2011. "If We Build, Will They Pay? Predicting Property Price Effects of Transport Innovations," SERC Discussion Papers, Spatial Economics Research Centre, LSE 0075, Spatial Economics Research Centre, LSE.

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