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Theories of system of cities

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Author Info
Abdel-Rahman, Hesham M. (University of New Orleans)
Anas, Alex (State University of New York at Buffalo)

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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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Paper provided by University of New Orleans, Department of Economics and Finance in its series Working Papers with number 2003-08.

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Length: 64 pages
Date of creation: Sep 2003
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Handle: RePEc:uno:wpaper:2003-08

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Postal: New Orleans, Louisiana 70148
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Related research
Keywords: Agglomeration Cities Growth Industrial structure Trade Welfare

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Find related papers by JEL classification:
H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
R11 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Analysis of Growth, Development, and Changes
R12 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
R13 - Urban, Rural, and Regional Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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. 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)
  4. Erica Greulich & John Quigley & Steven Raphael, 2006. "The Anatomy of Rent Burdens: Immigration, Growth and Rental Housing," Berkeley Program on Housing and Urban Policy, Working Paper Series 1049, Berkeley Program on Housing and Urban Policy. [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. Souleymane Coulibaly, 2004. "Evolving Cityscapes: Agglomeration and Specialization with Mobile Labor and Vertical Linkages," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 04.17, Université de Lausanne, Faculté des HEC, DEEP. [Downloadable!]
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