A TRACTABLE CITY MODEL FOR AGGREGATIVE ANALYSIS

Satyajit Chatterjee () and Burcu Eyigungor

International Economic Review, 2017, vol. 58, issue 1, 127-155

Abstract: An analytically tractable city model with external increasing returns is presented. The equilibrium city structure is either monocentric or decentralized. Regardless of which structure prevails, intracity variation in endogenous variables displays exponential decay from the city center, where the decay rates depend only on parameters. Given population, the equilibrium of the model is generically unique. Tractability permits explicit expressions for when a central business district (CBD) will emerge in equilibrium, how external increasing returns affect the steepness of downtown rent gradients, and how wages and welfare vary with population. An application to urban growth boundary is presented.

Date: 2017
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https://doi.org/10.1111/iere.12211

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Working Paper: A tractable city model for aggregative analysis (2015)
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