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A new economic geography model of central places

  • TABUCHI, Takatoshi
  • THISSE, Jacques-François

One of the most striking feature of the space-economy is that cities form a hierarchical system exhibiting some regularity in terms of their size and the array of goods they supply. In order to show how such a hierarchical system may emerge, we consider a model with monopolistically competitive markets for the industrial sectors. As transport costs steadily decrease from large values, the urban system formed by several small cities entails structural changes in that some cities expand at the expense of the others by attracting a growing number of industries. Beyond some threshold, some cities disappear from the space-economy. Such an evolution of the urban system describes fairly well what has been observed in various historical periods that have experienced major changes in transportation technologies and/or political unification.

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File URL: http://dx.doi.org/10.1016/j.jue.2010.11.001
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Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers RP with number -2267.

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Handle: RePEc:cor:louvrp:-2267
Note: In : Journal of Urban Economics, 69(2), 240-252, 2011
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  1. Mion, Giordano, 2003. "Spatial Externalities and Empirical Analysis: The Case of Italy," ZEW Discussion Papers 03-38, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
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  11. Picard, Pierre M. & Zeng, Dao-Zhi, 2005. "Agricultural sector and industrial agglomeration," Journal of Development Economics, Elsevier, vol. 77(1), pages 75-106, June.
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