A simple model of economic geography à la Helpman-Tabuchi

Yasusada Murata and Jacques Thisse

No 2005017, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: This paper explores the interplay between commodities’ transportation costs and workers’ commuting costs within a general equilibrium framework `a la Dixit-Stiglitz. Workers are mobile and choose a region where to work as well as an intraurban location where 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: commuting costs; urban costs; transportation costs; economic geography; agglomeration (search for similar items in EconPapers)
JEL-codes: F12 R12 (search for similar items in EconPapers)
Date: 2005-02
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Citations: View citations in EconPapers (76)

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Related works:
Journal Article: A simple model of economic geography a la Helpman-Tabuchi (2005)
Working Paper: A Simple Model of Economic Geography à la Helpman-Tabuchi (2005)
Working Paper: A simple model of economic geography à la Helpman-Tabuchi (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2005017

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