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On the Number and Size of Cities

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  • Tabuchi, Takatoshi
  • Thisse, Jacques-François
  • Zeng, Dao-Zhi

Abstract

We study the effects of a decrease in trade costs on the spatial distribution of industry in a multi-regional economy, when a rise in the regional population of workers generates higher urban costs. When the number of cities is unaffected by falling trade costs, small cities become smaller for large trade costs, medium-sized cities become smaller for medium values of trade costs, and large cities become smaller for small trade costs. Furthermore, when urban costs are ‘identical,’ we show that there exists a path of stable equilibria such that the industry, first, experiences progressive agglomeration into a decreasing number of cities and, then, dispersion into a growing number of cities. The second phase arises because of the increasing urban costs associated with the process of agglomeration.

Suggested Citation

  • Tabuchi, Takatoshi & Thisse, Jacques-François & Zeng, Dao-Zhi, 2002. "On the Number and Size of Cities," CEPR Discussion Papers 3386, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:3386
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Ikeda, Kiyohiro & Akamatsu, Takashi & Kono, Tatsuhito, 2012. "Spatial period-doubling agglomeration of a core–periphery model with a system of cities," Journal of Economic Dynamics and Control, Elsevier, vol. 36(5), pages 754-778.
    2. Behrens, Kristian & Robert-Nicoud, Frédéric, 2008. "Survival of the fittest in cities: agglomeration, selection, and polarisation," LSE Research Online Documents on Economics 28506, London School of Economics and Political Science, LSE Library.
    3. Chincarini, Ludwig & Asherie, Neer, 2008. "An analytical model for the formation of economic clusters," Regional Science and Urban Economics, Elsevier, vol. 38(3), pages 252-270, May.
    4. Behrens, Kristian, 2005. "Market size and industry location: Traded vs non-traded goods," Journal of Urban Economics, Elsevier, vol. 58(1), pages 24-44, July.
    5. Akamatsu, Takashi & Takayama, Yuki, 2009. "A Simplified Approach to Analyzing Multi-regional Core-Periphery Models," MPRA Paper 21739, University Library of Munich, Germany, revised 29 Oct 2009.
    6. Pierre Picard & Takatoshi Tabuchi, 2010. "Self-organized agglomerations and transport costs," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 42(3), pages 565-589, March.
    7. PICARD, Pierre & TABUCHI, Takatoshi, 2003. "Natural agglomeration," CORE Discussion Papers 2003101, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    8. Masahisa Fujita & Tomoya Mori, 2005. "Frontiers of the New Economic Geography," KIER Working Papers 604, Kyoto University, Institute of Economic Research.
    9. Akamatsu, Takashi & Takayama, Yuki & Ikeda, Kiyohiro, 2012. "Spatial discounting, Fourier, and racetrack economy: A recipe for the analysis of spatial agglomeration models," Journal of Economic Dynamics and Control, Elsevier, vol. 36(11), pages 1729-1759.
    10. Oyama, Daisuke, 2009. "Agglomeration under forward-looking expectations: Potentials and global stability," Regional Science and Urban Economics, Elsevier, vol. 39(6), pages 696-713, November.
    11. Sorek, Gilad, 2009. "Migration costs, commuting costs and intercity population sorting," Regional Science and Urban Economics, Elsevier, vol. 39(4), pages 377-385, July.
    12. Massimo Del Gatto, 2004. "Agglomeration, Integration, and Territorial Authority Scale in a System of Trading Cities. Centralisation versus Devolution," Working Papers 2004.93, Fondazione Eni Enrico Mattei.
    13. Theodore Tsekeris & Klimis Vogiatzoglou, 2011. "Spatial agent-based modeling of household and firm location with endogenous transport costs," Netnomics, Springer, vol. 12(2), pages 77-98, July.
    14. Kristian Behrens & Frédéric Robert-Nicoud, 2009. "Survival of the Fittest in Cities: Agglomeration, Polarization, and Income Inequality," Cahiers de recherche 0919, CIRPEE.
    15. Garmestani, Ahjond S. & Allen, Craig R. & Gallagher, Colin M., 2008. "Power laws, discontinuities and regional city size distributions," Journal of Economic Behavior & Organization, Elsevier, vol. 68(1), pages 209-216, October.
    16. Kim, Ho Yeon, 2012. "Shrinking population and the urban hierarchy," IDE Discussion Papers 360, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    17. Jens Südekum, 2009. "Regional costs-of-living with congestion and amenity differences: an economic geography perspective," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 43(1), pages 49-69, March.
    18. Theodore Tsekeris & Klimis Vogiatzoglou & Stelios Bekiros, 2011. "Multi-Regional Agent-Based Modeling of Household and Firm Location Choices with Endogenous Transport Costs," ERSA conference papers ersa10p479, European Regional Science Association.

    More about this item

    Keywords

    agglomeration; city; multi-regional system; multiplicity of equilibria; transport costs; urban costs;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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