Trade costs versus urban costs. Do jobs move to the suburbs or to the sticks ?

Jean CAVAILHéS, Carl GAIGNƒ and Jacques Thisse ()
Authors registered in the RePEc Author Service: Carl Gaigne

No 2004021, CORE Discussion Papers from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: We analyze how the interplay between urban costs, wage wedges, and trade costs may affect the interregional location of firms as well as the intraurban location, within the central business district or in a secondary employment center (SEC) of the selected region. In this way, we investigate, on the one hand, how trade may affect the internal structure of cities and, on the other hand, how decentralizing the production and consumption of goods to subcenters changes the intensity of trade by allowing large metropolitan areas to maintain their predominance. We show that, despite low commuting costs, SECs may emerge when the urban population is large and communication technologies are efficient, two features that seem to characterize modern economies. Moreover, when trade costs fall from high levels, the economy moves gradually from dispersion to agglomeration, favoring the formation of SECs. However, in an integrating world, the center of a small monocentric city could be more attractive than subcenters of large polycentric cities. Nevertheless, the core retains its predominance through the relative growth of its main center, which occurs at the expense of its subcenters.

Keywords: city structure; polycentric city; commuting costs; trade costs; relocation (search for similar items in EconPapers)
JEL-codes: F12 F22 R12 R14 (search for similar items in EconPapers)
Date: 2004-04-01
View list of references

Downloads: (external link)
http://www.core.ucl.ac.be/services/psfiles/dp04/dp2004_21.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:cor:louvco:2004021

Access Statistics for this paper

More papers in CORE Discussion Papers from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)
Address: Voie du Roman Pays 34, 1348 Louvain-la-Neuve (Belgium)
Contact information at EDIRC.
Series data maintained by Alain GILLIS ().