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A Tractable City Model For Aggregative Analysis

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  • Satyajit Chatterjee
  • Burcu Eyigungor

Abstract

An analytically tractable city model with external increasing returns is presented. The equilibrium city structure is either monocentric or decentralized. Regardless of which structure prevails, intracity variation in endogenous variables displays exponential decay from the city center, where the decay rates depend only on parameters. Given population, the equilibrium of the model is generically unique. Tractability permits explicit expressions for when a central business district (CBD) will emerge in equilibrium, how external increasing returns affect the steepness of downtown rent gradients, and how wages and welfare vary with population. An application to urban growth boundary is presented.

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  • Satyajit Chatterjee & Burcu Eyigungor, 2017. "A Tractable City Model For Aggregative Analysis," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 58(1), pages 127-155, February.
    • Handle: RePEc:wly:iecrev:v:58:y:2017:i:1:p:127-155
    DOI: 10.1111/iere.12211
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    More about this item

    JEL classification:

    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • Z10 - Other Special Topics - - Cultural Economics - - - General

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