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The size of regions with land use for production

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  • Pflüger, Michael
  • Tabuchi, Takatoshi

Abstract

Highlighting market-size effects, the new economic geography has enriched our understanding of the functioning of the space economy. Contrary to its importance in practice, land use for production has received no attention in the branches of the economy, on which the new economic geography puts its focus: goods and services produced under increasing returns. We develop a simple general equilibrium model, an extension of the model by Helpman (1998), in which the increasing returns sector uses land in addition to labor. We identify a sharp contrast: with land use for production, a bell-shaped curve of spatial development can emerge. Such a curve is ruled out, however, if land is used for housing only. In contrast to common explanations for the bell-shaped curve which assume that part of the workforce is immobile, our approach builds on the insight that, ultimately, there is only one immobile resource, land.

Suggested Citation

  • Pflüger, Michael & Tabuchi, Takatoshi, 2010. "The size of regions with land use for production," Regional Science and Urban Economics, Elsevier, vol. 40(6), pages 481-489, November.
  • Handle: RePEc:eee:regeco:v:40:y:2010:i:6:p:481-489
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    1. repec:spr:anresc:v:59:y:2017:i:2:d:10.1007_s00168-017-0840-7 is not listed on IDEAS
    2. Kohei Nagamachi, 2012. "Comparative Advantage and Skill Premium of Regions," CIRJE F-Series CIRJE-F-868, CIRJE, Faculty of Economics, University of Tokyo.
    3. Matthias Wrede, 2013. "Heterogeneous skills and homogeneous land: segmentation and agglomeration," Journal of Economic Geography, Oxford University Press, vol. 13(5), pages 767-798, September.
    4. Kohei Nagamachi, 2013. "Task Trade and the Size Distribution of Cities," CIRJE F-Series CIRJE-F-886, CIRJE, Faculty of Economics, University of Tokyo.
    5. María Pilar Martínez-García & Jose Rodolfo Morales, 2016. "Resource effects in the Core-Periphery model," Gecomplexity Discussion Paper Series 201607, Action IS1104 "The EU in the new complex geography of economic systems: models, tools and policy evaluation", revised Jul 2016.

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