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Spatial frictions

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  • Behrens, Kristian
  • Mion, Giordano
  • Murata, Yasusada
  • Südekum, Jens

Abstract

The world is replete with spatial frictions. Shipping goods across cities entails trade frictions. Commuting within cities causes urban frictions. How important are these frictions in shaping the spatial economy? We develop and quantify a novel framework to address this question at three different levels: Do spatial frictions matter for the city-size distribution? Do they affect individual city sizes? Do they contribute to the productivity advantage of large cities and the nature of competition in cities? The short answers are: no, yes, and it depends.

Suggested Citation

  • Behrens, Kristian & Mion, Giordano & Murata, Yasusada & Südekum, Jens, 2011. "Spatial frictions," LSE Research Online Documents on Economics 121744, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:121744
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    More about this item

    Keywords

    trade frictions; urban frictions; productivity; city-size distribution; markups;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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