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Task Trade and the Size Distribution of Cities

  • Kohei Nagamachi

    (Faculty of Economics, University of Tokyo)

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       Taking account of the increasing importance of task trade in urban contexts, this paper provides a model of a system of cities in which ex ante identical locations specialize in tasks that differ in their skill intensity, resulting in a unique size distribution of cities. The necessary and sufficient condition for a power law including Zipf's law is derived, and a quantitative analysis shows that the model is consistent with the size distribution of U.S. cities. A welfare analysis is also conducted, suggesting excess agglomeration with sizable welfare loss under laissez-faire.

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    File URL: http://www.cirje.e.u-tokyo.ac.jp/research/dp/2013/2013cf886.pdf
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    Paper provided by CIRJE, Faculty of Economics, University of Tokyo in its series CIRJE F-Series with number CIRJE-F-886.

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    Length: 40 pages
    Date of creation: Apr 2013
    Date of revision:
    Handle: RePEc:tky:fseres:2013cf886
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    2. Huggett, Mark, 1993. "The risk-free rate in heterogeneous-agent incomplete-insurance economies," Journal of Economic Dynamics and Control, Elsevier, vol. 17(5-6), pages 953-969.
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    13. Gabaix, Xavier & Ioannides, Yannis M., 2004. "The evolution of city size distributions," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 53, pages 2341-2378 Elsevier.
    14. Michaels, Guy & Rauch, Ferdinand & Redding, Stephen J., 2013. "Task Specialization in U.S. Cities from 1880-2000," CEPR Discussion Papers 9308, C.E.P.R. Discussion Papers.
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    16. Pflüger, Michael & Tabuchi, Takatoshi, 2010. "The size of regions with land use for production," Regional Science and Urban Economics, Elsevier, vol. 40(6), pages 481-489, November.
    17. Wen‐Tai Hsu, 2012. "Central Place Theory and City Size Distribution," Economic Journal, Royal Economic Society, vol. 122(563), pages 903-932, 09.
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