Economics of Agglomeration

Masahisa Fujita and Jacques Thisse

No 1344, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We address the fundamental question arising in economic geography: why do economic activities agglomerate in a small number of places? The main reasons for the formation of economic clusters involving firms and/or households are analysed: (i) externalities under perfect competition; (ii) increasing returns under monopolistic competition; and (iii) spatial competition under strategic interaction. We review what has been accomplished in these three domains and identify a few general principles governing the organization of economic space. Other standard lines of research in location theory are also discussed while several alternative, new approaches are proposed.

Keywords: Agglomeration; City; Externality; Imperfect Competition; Trade (search for similar items in EconPapers)
JEL-codes: F12 L13 R12 (search for similar items in EconPapers)
Date: 1996-02
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Citations: View citations in EconPapers (485)

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Related works:
Working Paper: Economics of agglomeration (2019)
Book: Economics of Agglomeration (2013)
Book: Economics of Agglomeration (2013)
Journal Article: Economics of Agglomeration (1996)
Working Paper: Economics of agglomeration (1996)
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