Understanding the Internal Structure of Self-Organizing Cities

Stephen Ross and Xiaofang Dong

No 2012-34, Working papers from University of Connecticut, Department of Economics

Abstract: Lucas and Rossi-Hansberg (2002) and Fujita and Ogawa (1982, 1989) develop urban models in which economic activity self-organizes due to spillovers in production. However, Fujita and Ogawa (1982, 1989) show that rents and employment density are flat or falling as the city center is approached, while in the simulations of Lucas and Rossi-Hansberg (2002) rents rise at an increasing rate towards the center suggesting a concentration of employment near the center. For the Lucas and Rossi-Hansberg model, we prove that land rents and density must be flat or falling near the center. We explain how using a polar coordinate system when approximating a two-dimensional integral can create systematic imprecision in their simulations, and then present revised simulations. The proofs and simulations suggest that in urban models where economic activity self-organizes firms do not unduly cluster at the center of a central business district even in monocentric equilibria. JEL Classification: R13, R14, R30 Key words: non-monocentric cities, rent gradient, employment density, polar coordinate simulations

Pages: 20 pages
Date: 2012-10
New Economics Papers: this item is included in nep-geo and nep-ure
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Citations: View citations in EconPapers (1)

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