IDEAS home Printed from https://ideas.repec.org/p/hig/wpaper/151-ec-2016.html
   My bibliography  Save this paper

The Competitive Paradigm in Spatial Economics

Author

Listed:
  • Jacques-Francois Thisse

    (National Research University Higher School of Economics
    Catholic University of Louvain)

Abstract

This paper discusses the reasons for the spatial impossibility theorem, which states that the competitive paradigm cannot explain the formation of large urban agglomerations and trade ows. This result is especially meaningful insofar as it is internal to the theory itself. We then briey explores dierent solutions to remedy to this methodological failure.

Suggested Citation

  • Jacques-Francois Thisse, 2016. "The Competitive Paradigm in Spatial Economics," HSE Working papers WP BRP 151/EC/2016, National Research University Higher School of Economics.
    • Handle: RePEc:hig:wpaper:151/ec/2016
    as

    Download full text from publisher

    File URL: https://www.hse.ru/data/2016/09/27/1122371753/151EC2016.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Miren Lafourcade & Jacques-François Thisse, 2011. "New Economic Geography: The Role of Transport Costs," Chapters, in: André de Palma & Robin Lindsey & Emile Quinet & Roger Vickerman (ed.), A Handbook of Transport Economics, chapter 4, Edward Elgar Publishing.
    2. Rebecca Diamond, 2016. "The Determinants and Welfare Implications of US Workers' Diverging Location Choices by Skill: 1980-2000," American Economic Review, American Economic Association, vol. 106(3), pages 479-524, March.
    3. Fujita,Masahisa, 1991. "Urban Economic Theory," Cambridge Books, Cambridge University Press, number 9780521396455, January.
    4. Jan Eeckhout & Roberto Pinheiro & Kurt Schmidheiny, 2014. "Spatial Sorting," Journal of Political Economy, University of Chicago Press, vol. 122(3), pages 554-620.
    5. Kristian Behrens & Gilles Duranton & Frédéric Robert-Nicoud, 2014. "Productive Cities: Sorting, Selection, and Agglomeration," Journal of Political Economy, University of Chicago Press, vol. 122(3), pages 507-553.
    6. Starrett, David, 1978. "Market allocations of location choice in a model with free mobility," Journal of Economic Theory, Elsevier, vol. 17(1), pages 21-37, February.
    7. Fujita,Masahisa & Thisse,Jacques-François, 2013. "Economics of Agglomeration," Cambridge Books, Cambridge University Press, number 9781107001411, January.
    8. Arvind Panagariya, 1998. "Do transport costs justifyregional preferential trading arrangements? no," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 134(2), pages 280-301, June.
    9. Redding, Stephen J., 2016. "Goods trade, factor mobility and welfare," Journal of International Economics, Elsevier, vol. 101(C), pages 148-167.
    10. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    11. Walter C. Labys & Chin W. Yang, 1997. "Spatial Price Equilibrium As A Foundation To Unified Spatial Commodity Modeling," Papers in Regional Science, Wiley Blackwell, vol. 76(2), pages 199-228, April.
    12. Samuelson, Paul A, 1983. "Thunen at Two Hundred," Journal of Economic Literature, American Economic Association, vol. 21(4), pages 1468-1488, December.
    13. Hamilton, Bruce W., 1980. "Indivisibilities and interplant transportation cost: Do they cause market breakdown?," Journal of Urban Economics, Elsevier, vol. 7(1), pages 31-41, January.
    14. Edward E. Leamer, 2007. "A Flat World, a Level Playing Field, a Small World After All, or None of the Above? A Review of Thomas L Friedman's The World is Flat," Journal of Economic Literature, American Economic Association, vol. 45(1), pages 83-126, March.
    15. James E. Anderson, 2011. "The Gravity Model," Annual Review of Economics, Annual Reviews, vol. 3(1), pages 133-160, September.
    16. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stef Proost & Jacques-François Thisse, 2019. "What Can Be Learned from Spatial Economics?," Journal of Economic Literature, American Economic Association, vol. 57(3), pages 575-643, September.
    2. Behrens, Kristian & Robert-Nicoud, Frédéric, 2015. "Agglomeration Theory with Heterogeneous Agents," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 171-245, Elsevier.
    3. José M. Gaspar, 2018. "A prospective review on New Economic Geography," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 61(2), pages 237-272, September.
    4. Combes, Pierre-Philippe & Gobillon, Laurent, 2015. "The Empirics of Agglomeration Economies," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 247-348, Elsevier.
    5. Chang-Tai Hsieh & Enrico Moretti, 2019. "Housing Constraints and Spatial Misallocation," American Economic Journal: Macroeconomics, American Economic Association, vol. 11(2), pages 1-39, April.
    6. Fujita, Masahisa & Thisse, Jacques-François, 2001. "Agglomération et marché," Cahiers d'Economie et de Sociologie Rurales (CESR), Institut National de la Recherche Agronomique (INRA), vol. 58.
    7. repec:hal:spmain:info:hdl:2441/1kv8mtgl748r0ahh12air9erdc is not listed on IDEAS
    8. Carl Gaigné & Jacques-François Thisse, 2013. "New Economic Geography and the City," Working Papers SMART 13-02, INRAE UMR SMART.
    9. Oshiro, Jun & Sato, Yasuhiro, 2021. "Industrial structure in urban accounting," Regional Science and Urban Economics, Elsevier, vol. 91(C).
    10. Fujita, Masahisa & Thisse, Jacques-François, 2009. "New Economic Geography: An appraisal on the occasion of Paul Krugman's 2008 Nobel Prize in Economic Sciences," Regional Science and Urban Economics, Elsevier, vol. 39(2), pages 109-119, March.
    11. Gilles Duranton, 1997. "La nouvelle économie géographique : agglomération et dispersion," Économie et Prévision, Programme National Persée, vol. 131(5), pages 1-24.
    12. de Palma, André & Papageorgiou, Yorgos Y. & Thisse, Jacques-François & Ushchev, Philip, 2019. "About the origin of cities," Journal of Urban Economics, Elsevier, vol. 111(C), pages 1-13.
    13. Marcus Berliant & Yves Zenou, 2014. "Labor Differentiation and Agglomeration in General Equilibrium," International Regional Science Review, , vol. 37(1), pages 36-65, January.
    14. Moretti, Enrico & Hsieh, Chang-Tai, 2015. "Why Do Cities Matter? Local Growth and Aggregate Growth," CEPR Discussion Papers 10604, C.E.P.R. Discussion Papers.
    15. Takatoshi Tabuchi & Jacques†François Thisse & Xiwei Zhu, 2018. "Does Technological Progress Magnify Regional Disparities?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 59(2), pages 647-663, May.
    16. Fabien Candau & Elisa Dienesch, 2015. "Spatial distribution of skills and regional trade integration," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 54(2), pages 451-488, March.
    17. Christian Düben & Melanie Krause, 2021. "Population, light, and the size distribution of cities," Journal of Regional Science, Wiley Blackwell, vol. 61(1), pages 189-211, January.
    18. Thisse, Jacques-François & Fujita, Masahisa, 2008. "New Economic Geography: an appraisal on the occasion of Paul Krugman's 2008 Nobel Prize in Economics," CEPR Discussion Papers 7063, C.E.P.R. Discussion Papers.
    19. Kim, Jun Sung & Patacchini, Eleonora & Picard, Pierre M. & Zenou, Yves, 2017. "Urban Interactions," Working Paper Series 1192, Research Institute of Industrial Economics.
    20. Breinlich, Holger & Ottaviano, Gianmarco I.P. & Temple, Jonathan R.W., 2014. "Regional Growth and Regional Decline," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 4, pages 683-779, Elsevier.
    21. Zenou, Yves & picard, pierre & Patacchini, Eleonora, 2015. "Urban Social Structure, Social Capital and Spatial Proximity," CEPR Discussion Papers 10501, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    space; transport costs; land rent; general equilibrium;
    All these keywords.

    JEL classification:

    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hig:wpaper:151/ec/2016. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Shamil Abdulaev or Shamil Abdulaev (email available below). General contact details of provider: https://edirc.repec.org/data/hsecoru.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.