A Simple Model of Economic Geography à la Helpman-Tabuchi

Yasusada Murata and Jacques Thisse ()

No 4936, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper explores the interplay between commodities’ transportation costs and workers’ commuting costs within a general equilibrium framework à la Dixit-Stiglitz. Workers are mobile and choose a region to work in as well as an intra-urban location in which to live. We show that a more integrated economy need not be more agglomerated. Instead, low transportation costs lead to the dispersion of economic activities. This is because workers are able to alleviate the burden of urban costs by being dispersed, while retaining a good access to all varieties. By contrast, low commuting costs foster the agglomeration of economic activities.

Keywords: agglomeration; commuting costs; economic geography; transportation costs; urban costs (search for similar items in EconPapers)
JEL-codes: F12 R12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-geo and nep-ure
Date: 2005-02
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Related works:
Working Paper: A simple model of economic geography ˆ la Helpman-Tabuchi (2005)
Working Paper: A simple model of economic geography ˆ la Helpman-Tabuchi (2005)
Journal Article: A simple model of economic geography a la Helpman-Tabuchi (2005)
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