On the evolution of a multi-regional system

Takatoshi Tabuchi, Jacques Thisse and Dao-Zhi Zeng ()

No 2001003, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: We study the effects of a decrease in trade costs on the spatial distribution of industry in a multi-regional economy, when a rise in the regional population of workers generates higher urban costs. We show that high and low trade costs imply that all regions involve a positive share of the industrial sector. When urban costs are linear, there exists a stable equilibrium for almost all values of trade costs. Furthermore, as trade costs fall, there is a path of stable equilibria such that the industry is, first, agglomerated into a decreasing number of regions and, then, dispersed among a growing number of regions. The second phase arises because of the increasing urban costs associated with the process of agglomeration.

Keywords: multi-regional system; economic geography; agglomeration; transport costs; urban costs (search for similar items in EconPapers)
JEL-codes: F12 L13 R13 (search for similar items in EconPapers)
Date: 2001-01
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Citations: View citations in EconPapers (2)

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Working Paper: On the Evolution of a Multi-regional System (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2001003

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