Author Index - Cambridge University Pressassets.cambridge.org/97811070/01411/index/9781107001411...Masahisa Fujita and Jacques-françois Thisse Index More information Subject Index

Author Index

Abdel-Rahman, H., 108, 134Acemoglu, D., 114n8Alesina, A., 168n11, 179Allais, M., 30n1Alonso, W., 21, 61, 78, 96Anas, A., 4, 14, 97, 134, 228, 256n8, 330Anderson, J., 6Anderson, S. P., 146, 148, 242, 258, 262Arnott, R., 4, 82, 151, 177, 178Arrow, K., 18, 29–33, 59, 94n18, 101Arthur, W. B., 14n9Asami, Y., 64n7, 94, 96n20, 97Au, C. C., 133n18Audretsch, D. B., 191Aumann, R. J., 260

Bacolod, M., 136Bairoch, P., 2, 5, 62n3, 84, 149, 166, 426Baldwin, R. E., 307n9, 315, 374, 428Baumeiter, R. F., 188Baumol, W., 157Baumont, C., 97Baum-Snow, N., 335Beckmann, M. J., 32, 47, 54–55, 68, 75, 88,

96, 145, 188, 194, 346n1, 348Behrens, K., 357, 374, 383Belleflamme, P., 350Ben-Akiva, M., 258Berglas, E., 124, 164Berliant, M., 94, 97Bernard, A., 363Berry, S., 367Blaug, M., 20Borukhov, E., 191, 202Brakman, S., 286Braudel, F., 2

Brueckner, J. K., 90, 91n16Buchanan, J. M., 103n2, 150, 164Bull, B. S., 136

Cantillon, R., 8, 221Carroll, 90n15Casetti, E., 96–97Cavailhes, J., 335Caves, R. E., 453Chamberlin, E., 53–54, 101, 105, 141, 285Charlot, S., 136, 288, 321Chipman, J. S., 375Christaller, W., 135, 147, 387, 391, 424Ciccone, A., 124Combes, P.-P., 148, 191, 334, 342, 382–383,

430Cournot, A., 46Crafts, N., 348Cremer, H., 168n11

Darnell, A. C., 125D’Aspremont, C., 252Davis, D. R., 315, 373Davis, J. C., 454Deardorff, A. V., 41, 41Debreu, G., 18, 29–33, 59, 94n18, 101De Fraja, G., 258De Kerchove, A.-M., 168n11De Palma, A., 6n3, 146, 252, 257n9, 258, 262Diamond, J., 12Dixit, A. K., 53–54, 108, 111n7, 285–286,

347, 389Dos Santos Ferreira, R., 145Dunn, E. S., 21, 63Duranton, G., 53, 100, 136, 148, 228, 382,

430

495

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496 Author Index

Eaton, B. C., 23n15, 124, 146, 261, 388Egger, P., 467Ekelund, R. B., Jr., 20Ellison, G., 49, 124, 389Engel, C., 354Enke, E., 47Ethier, W., 106

Feldman, M. P., 191, 427Fingleton, B., 382Fischer, Cl., 187–188Flatters, F., 177Florian, M., 47Florida, R., 427Forslid, R., 307, 310Foster, L., 349Fujita, M., 16n11, 23, 79n9, 83, 89, 94, 96–98,

108, 120n12, 124, 134, 157, 166, 192, 202,211, 218n11, 219n13, 225, 227–228, 235,250, 251n6, 271, 290, 293n1, 299n5, 304,334, 389–390, 400, 418–419, 424, 450, 458,460, 468

Gabszewicz, J. J., 146, 252Gaffney, M., 157Gaigne, C., 374Gaspar, J., 191Gehrig, T., 269George, H., 122–123, 125, 145, 148, 154–157,

163–164, 167, 177Glaeser, E. L., 6, 25, 49, 85n13, 90n15, 114,

124, 132n16, 133n17, 190–191, 335, 427,471

Gobillon, L., 148, 382, 430Gokan, T., 468Goldstein, G. S., 69, 74–75, 133Gottlieb, J. D., 132n16Greenhut, M., 18, 353n5, 354Griliches, Zvi, 157Gronberg, T. J., 133Grossman, G., 437Gupta, B., 263

Hagerstrand, T., 189Hall, R. E., 124Haltiwanger, J., 349Hamaguchi, N., 389Hamilton, B. W., 47Handbury, J., 304Hanson, G. H., 349Harris, C., 346Hartwick, J., 97

Hausmann, 178n15Head, 374Hebert, R. F., 20Heffley, D. R., 47Heijdra, B. J., 286Helpman, E., 23, 125n12, 288, 347, 358, 373,

432, 437, 468n9, 469, 471Helsley, R. W., 111, 114n9, 166n10Henderson, J. V., 23, 89, 124, 126, 132,

133n18, 135n19, 136, 148, 151–152, 166,177, 190, 228, 239, 306, 429, 438, 454

Herbert, J. D., 97Hicks, J., 18, 318, 354Hildenbrand, W., 94n18Hirschman, A. O., 14n9, 427Hochman, O., 124, 167, 191, 202Hohenberg, P., 62n3, 84, 178, 189, 239, 387,

423–424, 427Hoover, E., 12, 18, 30, 124, 262Hotelling, H., 102, 125, 137, 145–147, 236,

251, 253, 255, 257n9, 258–261, 264, 278Hummels, D., 360Hung, C.-S., 353n5Huriot, J.-M., 97Hurter, A. P., 262

Imai, H., 192, 211, 218n11Ingram, 90n15Ioannides, Y. M., 188, 193Isard, W., 18, 21

Jackson, M. O., 188, 193Jacobs, J., 136Jaffe, A. B., 190, 429Jofre-Monseny, J., 124Jones, C. I., 40n5Jovanovic, M., 25

Kahn, M. E., 335Kaldor, N., 14n9, 22, 53–54, 103–104, 137,

306, 318, 320Kanemoto, Y., 124, 151, 218n11Kerr, W. R., 124Kim, S., 334Klein, A., 348Klenow, P. J., 360Kohlhase, J. E., 6Koopmans, T., 18–19, 32, 47, 49, 55, 68, 75,

236Krugman, P. R., 16–17, 23–24, 54, 125n14,

135, 147, 285–290, 298–299, 304, 306–307,310–311, 330–331, 334–335, 342–343, 347,






Author Index 497

356, 358, 359, 371, 373–374, 389, 400, 419,424, 428, 455n5, 471

Kuncoro, A., 124

Labbe, M., 147n22Labys, W. C., 47Launhardt, W., 12, 20–21, 62–63, 145, 237Leary, M. R., 188Lederer, P. J., 262Lees, L. H., 62n3, 84, 178, 189, 239, 387, 424,

427Lerner, A., 237Lipsey, R. G., 23n15, 124, 146, 261, 388Liu, H.-L., 250Losch, A., 12, 18, 30, 54, 103, 147, 348, 387Loss, M., 47Lucas, R. E., 9, 14, 114, 189, 192n2, 348

Magrini, S., 11n6Manne, A., 147Manski, C., 15Marchand, B., 178n15Markusen, J. R., 467Marshall, A., 13–14, 100–101, 114Marshall, J., 387Martin, P., 374, 428Martin, R., 4Matsuyama, K., 14n9, 286Mayer, T., 343, 348, 363, 374, 383McFadden, D., 254McKenzie, L., 29McLaren, J., 459McMillan, J., 265Meade, J. E., 125Melitz, M., 358n8, 468n9Mieszkowsi, P., 177Mills, E. S., 11, 69, 75, 78, 96, 102–103, 124,

156n5Mion, G., 430Mirrlees, J., 31, 85, 97, 124, 132Mitra, A., 239Modigliani, F., 157Mohring, H., 96Moretti, E., 430Mori, T., 293n1, 390, 418–419, 424Moses, L. N., 69, 74–75Mossay, P., 202, 299Mulligan, G., 388Murata, Y., 289Musgrave, R., 157Muth, R. F., 78, 96, 298Myrdal, G., 14n9, 286–287, 470

Nagurney, A., 47Nakajima, K., 375Naticchioni, P., 430Navaretti, G. B., 453Nelson, P., 238Nerlove, M. L., 69Nocke, V., 366Norman, G., 146, 258, 353n5Norman, V. , 347

Ogawa, H., 23, 218n11, 219n13O’Hara, D. J., 191, 202Ohlin, B., 10, 52, 342, 351, 354, 368Ohmae, K., 85n13Okubo, T., 365, 368n9Ota, M., 227–228, 231Ottaviano, G. I. P., 307, 311, 343, 348, 357n8,

361, 363, 374Oyama, D., 287, 311, 312n11, 334

Pal, D., 263Papageoergiou, Y., 16n10, 23, 97, 198n3, 236,

247n4Paris, Scott, xiiiParsley, D. C., 354Peeters, D., 147n22Penn, W., 132Peri, G., 190, 429, 438Perroux, F., 14n9Pfluuger, M., 290, 333Picard, P., 202, 298, 350, 365, 368n9,

374Pigou, 262Pines, D., 97, 124, 167Pirenne, H., 166Plato, 16n10, 471Polese, M., 136Pollard, S., 342, 346Ponsard, C., 18n12Porter, M. E., 350Prager, J.-C., 429Puga, D., 53, 100, 124, 136, 228Pyke, F., 349

Quigley, J. M., 288Quinzii, M., 388

Raphael, S., 288Rappaport, J., 49Redding, S., 347–348, 374–375Reilly, W. L., 256Ricardo, D., 20, 60Rice, P., 132n16






498 Author Index

Robert-Nicoud, F., 298n4, 344Rogers, C. A., 374Rogers, J., 354Romer, P., 40n5, 114, 189, 437Rosentein-Rodan, P. N., 14n9Rosenthal, S. S., 124, 148Roses, J. R., 335Rossi-Hansberg, E., 192n2Rothschild, M., 265

Sachs, J., 49, 427Salop, S. C., 54, 145Samuelson, P. A., 20, 33, 40, 47, 63n6, 150,

156, 161, 286Sandholm, W. H., 311n10Sarkar, J., 263Sato, Y., 346n2Saxenian, A., 189, 349Schmeidler, D., 297Schulz, N., 268Schumacher, H., 16n11Schumpeter, J., 18Schweizer, U., 47, 74–75, 97, 124Scitovsky, T., 14, 157, 318Scotchmer, S., 103n2, 167, 177Selten, 259Serk-Hanssen, J., 125Singer, H. W., 237Small, K. A., 4Smith, A., 7, 17, 22, 100–101, 105, 110, 346,

423Smith, H., 269Smith, T. E., 94, 96, 202Smith, T. R., 198n3Smith, W. D., 189n1Solow, R., 21, 79n10, 96, 157Spolaore, E., 168n11, 179Spulber, D. F., 5Sraffa, P., 19Stahl, K., 264, 268Starrett, D., 19, 30, 39, 45, 125, 161Stern, N., 145Stevens, B. H., 97Stigler, G. J., 189Stiglitz, J., 53–54, 108, 111n7, 122, 151, 157,

177, 285–286, 389Stollsteimer, J. F., 147Storper, M., 25Strange, W. C., 111, 114n9, 124, 136, 148,

166n10Streeten, P., 179Stuart, C., 238

Sturm, D., 375Syverson, C., 349

Tabuchi, T., 134, 288, 305, 315n15, 343,346n2, 348, 390, 424

Takahashi, T., 368, 371Takatsuka, H., 349, 368, 372, 374Takayama, T., 47Tauchen, H., 189Teece, D. J., 429Teitz, M. B., 151–152Thisse, J.-F., 89–90, 134, 142, 145–146, 167,

177, 236, 252, 258, 271, 289–290, 298, 305,343, 348, 350, 365, 374, 382–383, 388, 390,421–422, 424, 429, 450, 458, 460

Tideman, N., 157Tiebout, C. M., 150–152, 179Tirole, 252Tobin, J., 157Tokunaga, S., 97Toulemonde, E., 298, 341, 374Trajtenberg, M., 190Turner, M., 124

Van Wincoop, E., 6Van Ypersele, T., 361, 374Varaiya, P. V., 74–75, 97Venables, A. J., 132n16, 290, 304, 330,

334–335, 347, 419, 453, 455n5Vickrey, W., 102, 123, 125, 146, 157Viladecans-Marsal, E., 124Vidal de la Blache, P., 9–10Von Thunen, J. H., 16–17, 20–21, 59–60,

67–68, 75, 388–389

Warsh, D., 55Weber, A., 288, 346Wei, S.-J., 354Weinstein, D., 304, 315, 367Wheaton, W. C., 97Whitaker, J. K., 156n4Wildasin, D., 85, 177Wilson, A. G., 256n8Witte, A. D., 189Wolinsky, A., 188, 193, 264, 268

Yamamoto, K., 346n2Yang, C. W. 47Yeaple, S. R., 468n9

Zeng, D.-Z., 343, 349, 367, 372, 374Zenou, Y., 15, 90, 97, 271, 277n12Zoller, H. G., 177






Subject Index

Accessibilitycommunication and, 192, 197, 208–215,

218–227, 233–234emergence of cities and, 409increasing returns and, 142, 145, 151land rent and, 60, 75, 78–79, 83, 89linear, 192, 210–213, 218–221, 226,

236spatially discounted, 210–211, 221–224,

233, 243von Thunen model and, 60, 75, 78

Age of Internet, 9Agglomeration

cities and, 387 (see also Cities)clusters and, 2, 4, 9, 13–14, 24 (see also

Clusters)coagglomeration and, 271, 290, 336–342,

402–416commercial districts and, 4communication and, 187, 190–197, 201,

205, 211, 218–221, 227–228compensating losers and, 318–322complementarity and, 9, 299, 438core-periphery (CP) model and, 285–335

(see also Core-periphery (CP) model)diseconomies and, 16dispersion and, 9 (see also Dispersion)economic theory and, 1–25efficiency of, 260–262emergence of large, 49–50externalities and, 13–16 (see also

Externalities)formation of input centers and, 269–277globalization and, 453–454, 460, 462–463,

470

growth and, 427–432, 442–453, 470Henry George Theorem and, 122–123, 125,

145, 146, 154–157, 163–164, 167, 177imperfect competition and, 235–239,

243–244, 247n4, 251–253, 256–263,268–272, 277–278

increasing returns and, 10–13, 99–100,103n1, 105, 112, 114–115, 121, 124, 126,128, 130, 134, 136, 140, 148

international trade theory and, 10, 20, 125land rent and, 84, 98location theory and, 1, 10, 16n11, 22–23,

104, 137, 251, 348, 353, 374market size and, 349–350, 358–362, 365,

371, 374, 378–383monopolistic competition and, 286–291,

301–307, 310, 314–322, 326–335,338–342

optimality and, 201 (see also Optimality)price mechanism breakdown and, 30–31,

44–46, 49–55public sector and, 149, 163regional economics and, 11, 55, 209, 286,

336retailers and, 100, 235, 237–238, 248,

251–269shipping goods and, 262–269spatial impossibility theorem and, 32,

34–47, 52, 54, 59–61, 73, 100–101, 125,147, 236

spatial interactions and, 15, 210, 256transport costs and, 8–9 (see also Transport

costs)von Thunen model and, 16–17 (see also Von

Thunen model)

499






500 Subject Index

Aggregate accessibility, 208, 211, 215, 227,237

Agriculturecore-periphery model and, 291–293, 300,

306, 307n9emergence of cities and, 388n1, 388–403,

406–411, 416, 418–424growth and, 428, 433, 435, 437increasing returns and, 117–118, 120, 123,

147, 149land rent and, 59–60, 63–64, 66, 69, 83,

84–85, 87, 92–94market size and, 351–353, 360, 368,

372–373, 374mobility and, 286monopolistic competition and, 286–288,

291–293, 297–298, 301, 306–307, 309,314–322, 331, 336–342

shipping and, 293n1 (see also Shipping)technology and, 5, 7transport costs and, 372–373von Thunen model and, 59–77

Amenitiesincreasing returns and, 132land rent and, 62, 87, 90–94price mechanisms and, 31, 49, 52public sector and, 157

Animal Farm (Orwell), 148Arrow-Debreu model, 30, 59, 94n18, 101Autarky, 11, 39, 50, 52

Backyard capitalism, 11, 32, 39, 103, 219, 248Bell-shaped curve

communication and, 188, 198, 203–204core-periphery (CP) model and, 330–335market size and, 366, 371monopolistic competition and, 290, 330–335

Bid rent functioncommunication and, 194, 206, 208–213,

216, 233, 240concept of, 61economic theory and, 21imperfect competition and, 236, 240,

243–244, 250, 273, 276increasing returns and, 116land rent and, 61, 64–73, 76, 79–83, 86–87,

90, 92–97public sector and, 165, 175

Bifurcation, 305, 378, 421, 423Black hole condition, 302, 310, 398, 401–402,

409, 414, 416, 419, 424

Blue Banana, 15Break point, 304–305, 326, 328–329, 344, 422Bulgaria, 3

Causalitybidirectional, 130circular, 130, 286–287, 290, 335, 429cumulative, 14n9, 341, 370economic theory and, 8, 15growth and, 429increasing returns and, 130market size and, 370monopolistic competition and, 286–287,

290, 336, 342Central business district (CBD)

communication and, 197, 202, 204, 219,235

density and, 202–204firm interaction and, 202–204imperfect competition and, 235, 239, 269,

271–277increasing returns and, 99–101, 107,

110–113, 127–128, 149land rent and, 78–84, 88–89, 93, 95–96, 98matching and, 110–113monocentric cities and, 219monopolistic competition and, 288, 323secondary employment centers and,

271–277Central place theory, 135, 387–388, 390,

421–424Centrifugal forces

communication and, 187, 191, 202economic theory and, 9, 16emergence of cities and, 389imperfect competition and, 258, 262–263monopolistic competition and, 286

Centripetal forcescommunication and, 187, 191economic theory and, 9, 17growth and, 429imperfect competition and, 236, 239, 263monopolistic competition and, 286

Choke prices, 353, 357Cities

aggregate accessibility and, 78–83, 208,211, 215, 227, 237

agriculture and, 388n1, 389–403, 406–411,416, 418–424

black hole condition and, 302, 310, 398,401–402, 409, 414, 416, 419, 424






Subject Index 501

boundaries and, 149, 165–166, 200, 237,274–276

central business district (CBD) and, 61 (seealso Central business district (CBD))

central place theory and, 135, 387–388, 390,421–424

clusters and, 2, 4, 9, 13–14, 24, 235–239,256–257, 261–268, 277, 280–281 (seealso Clusters)

coagglomeration of intermediate/finalsectors and, 402–416

collective ownership and, 157–158as community, 120–122consumer-interaction outcomes and,

193–202democratized, 149diversified, 2–3, 8–9, 30, 105, 133–136,

179, 335, 390, 402downtowns and, 9, 87, 239–251duocentric configuration and, 192, 219n13,

222–223, 226, 227, 233–234factory towns and, 4, 101, 105, 115–119,

122–123, 132as firms, 115–120 (see also Firms)formation under variety preference and,

391–402Henry George Theorem and, 122–123, 125,

145, 146, 154–157, 163–164, 167, 177historical perspective on, 6–9integrated, 226, 247, 402, 406–411, 416intercity trade and, 125–137jurisdictional issues and, 4, 150–151, 164,

168–177, 179, 323local government and, 53, 103, 120, 126,

128, 132–133, 158, 166–168, 178, 193,390

local public good and, 24, 89–90, 93, 100,104, 106n5, 122n13, 133, 149–169,177–178, 437–438

location and, 301, 387–389, 393–395,398–400, 403–405, 408–413, 416–419,422–423 (see also Location)

metropolitan structures and, 3–4monocentric, 61 (see also Monocentric cities)networks of, 418–421optimal size of, 12, 16n10, 151, 157,

198–202polycentric, 221 (see also Polycentric cities)population density and, 7, 62, 79n9, 83–84,

157, 170, 175, 187–188, 195–198, 201,346n2

population growth and, 390, 400–402, 410,414, 416, 423

primacy trap and, 410–411, 416production and, 392, 403–404, 406, 408n4,

411, 422–424 (see also Production)public sector and, 149–184residential equilibrium and, 62, 78–87,

95–96, 116–118, 143, 153–154, 160–162,175, 198, 272–273, 322

resilience of, 423self-organizing, 194–198size under scale economies and, 114–125spatial impossibility theorem and, 32,

34–47, 52, 54, 59–61, 73, 100–101, 125,147, 236

spatial interdependence of firms/workersand, 205–211

spatial scale and, 2, 4, 6, 24, 54, 147, 278,335, 383, 466, 471

specialized, 402, 411–416, 423–424systemic framework for, 122–124technology and, 391, 400, 403 (see also

Technology)transport costs and, 151, 169, 171–176, 200

(see also Transport costs)urban centers and, 198, 235, 387, 400urban systems and, 24, 103, 105, 125, 127,

129, 132–134, 159n8, 163, 331, 387–391,416–424

walled, 149world without, 11zones and, 2, 66, 77, 88, 92, 266

Clusterscity formation under preference and,

399–400communication and, 191, 193, 205competition and, 424emergence of cities and, 375–379, 388, 389,

399, 424equilibrium and, 376–381globalization and, 463growth and, 427imperfect competition and, 235–239,

256–257, 261–268, 277, 280–281increasing returns and, 103, 136–137,

140land rent and, 89market size and, 349–350, 375–382price mechanism breakdown and, 46size of, 379–381

Coase Theorem, 115






502 Subject Index

Communicationaccessibility and, 192, 197, 208–215,

218–228, 233–234, 243agglomeration and, 187, 190–205, 211,

218–221, 227–228bid rent function and, 194, 206, 208–213,

216, 233central business district (CBD) and, 197,

202, 204, 219, 235centrifugal forces and, 187, 191, 202centripetal forces and, 187, 191clusters and, 191, 193, 205community and, 189n1commuting costs and, 192, 206, 212, 219,

226, 228, 233competition and, 187–190, 193, 198, 202,

205–206, 209, 211, 219, 235composite good and, 194, 206consumers and, 187–188, 191–202,

204–206costs of, 1–3, 24, 193, 219–220, 306, 378,

426, 431–432, 455–470cross-commuting and, 210–212, 215decentralization and, 219, 228density and, 187–188, 194–198, 201–204,

207–208, 211developers and, 193, 203dispersion and, 193, 205, 229distance-decay effect and, 90, 189, 192, 210,

219, 242, 382, 438, 440diversity and, 191, 229duocentric configuration and, 192, 219n13,

223, 226, 233–234employment centers and, 227endogeneity and, 195–197, 202, 205entropy and, 210equilibrium and, 34–45, 188, 191–232,

237exogeneity and, 197, 208externalities and, 14, 189, 192n2, 193–204,

208, 218n11face-to-face, 5, 106, 114, 189–191, 206,

340, 370firms and, 187–193, 197, 202–223,

227–229, 234–238growth and, 189, 192n2, 219, 229Hagerstrand and, 189heterogeneity and, 206, 210, 221homogeneity and, 187, 193, 205, 229households and, 187–188, 191, 193,

205–213, 216, 229, 234, 236

housing and, 202Industrial Revolution and, 189, 219information and, 188–193, 204–210,

220–221, 229innovation and, 190, 208integrated districts and, 213, 215, 221interchange of ideas and, 190, 193, 220intermediate goods and, 218n11labor and, 187, 191, 193, 205–212, 214,

218–221, 223, 227, 233, 235land use and, 187–188, 191–211, 214–215,

218–221, 227, 234, 240learning and, 191, 221local government and, 193location and, 187–195, 198–222, 229–238manufacturing and, 189, 219markets and, 187–193, 198, 201–211, 214,

220–223, 230–235monocentric cities and, 192, 211–221,opportunity cost and, 194, 205optimality and, 192, 198–202, 206–207,

210, 219–220, 231–233patents and, 190polycentric cities and, 221–227population constraint and, 199, 204, 209,

215, 234preferences and, 188, 193–197, 201–202production and, 189, 205, 208, 218n11, 219,

221proximity and, 187, 190, 193, 202, 220receivers and, 188residential equilibrium and, 198self-organizing cities and, 194–198social contacts and, 198n3spatial interdependence of firms/workers

and, 205–211specialization and, 218–219spillovers and, 189, 191, 192n2, 208,

221suburbanization and, 193, 228sustainability and, 217symmetry and, 193, 196, 198, 200, 207,

211, 214,technology and, 188–192, 201, 204–205transmitters and, 188, 229transport costs and, 200urban centers and, 198urbanization and, 191wages and, 191, 205–212, 215n9, 216, 221,

233–234welfare and, 188, 202, 229, 250, 260






Subject Index 503

Communitycity as, 120–122communication and, 189n1game theory and, 104Henry George Theorem and, 122–123,

125, 145, 146, 154–157, 163–164, 167,177

increasing returns and, 103, 105, 115,120–122, 125, 145

jurisdictional issues and, 4, 150–152, 164,168–177, 179, 323

local government and, 390 (see also Localgovernment)

local public goods and, 24, 89–90, 93, 100,104, 106n5, 122n13, 133, 149–154,158–169, 177–178, 437–438 (see alsoPublic goods)

political economy of formation of,169–173

public sector and, 150–151, 154, 157, 166,169–173, 174

Commuting costscities and, 192, 206, 210–215, 219–229,

235–236, 244–248, 263–2, 277clustering of retailers and, 263–269communication and, 192, 206, 212, 219,

227, 228, 237cross-commuting and, 210–212, 215duocentric configuration and, 192, 219n13,

222–227, 233–234imperfect competition and, 272–274,

276increasing returns and, 99, 101, 103, 105,

110, 113, 116, 118, 120, 126, 129,131–135

integrated districts and, 213, 215, 221, 244,246–248, 271

land rent and, 62, 79–89, 93, 95, 98monopolistic competition and, 288–290,

322–330, 335public sector and, 151–152, 155trade-offs and, 324–326von Thunen model and, 62

Comparative advantageeconomic theory and, 19emergence of cities and, 409increasing returns and, 100, 135market size and, 359, 368monopolistic competition and, 298,

314–315, 336Ricardian, 47–49, 52, 100, 135, 359

Competitionclusters and, 424communication externalities and, 187–190,

193, 198, 202, 205–206, 209, 211, 219,235

emergence of cities and, 389, 400, 405,408n4, 421, 423–424

globalization and, 453, 458–460, 465,471

growth and, 428, 432, 434–437homogeneous spatial economy and, 34–45imperfect, 343 (see also Imperfect

competition)increasing returns and, 99–108, 111–113,

115–116, 118, 122–128, 132, 137–148land rent and, 59–61, 63–64, 67–68, 71, 75,

78, 84–85, 88, 97localized, 137, 139, 168, 238market size and, 347–366, 370, 372–375,

379–382Marshallian externalities and, 13–14, 50–53,

81, 99, 101, 105, 106n5, 124 (see alsoExternalities)

monopolistic, 285 (see also Monopolisticcompetition)

oligopolistic, 22, 53–54, 237–238, 242,251–263, 286, 353n6

perfect, 11–12, 18, 21, 55, 60, 106, 125, 147,164, 285, 287, 336, 347, 372, 434, 435

proximity and, 347–348, 350, 365, 374–375spatial economics and, 18–20, 18–22spatial impossibility theorem and, 34–47

(see also Spatial impossibility theorem)spatial, 20–22 (see also Spatial competition)von Thunen model and, 59–61, 63–64,

67–68, 71, 75Complementarity, 9, 299, 438Complex integration, 468–469Composite good

cities and, 153–154, 158, 169, 175–176land rent and, 79–83, 86, 90, 94–95public goods and, 153–154, 158, 169,

175–176Condorcet equilibrium, 170–172Congestion, 62, 79, 103n1, 118n11, 130, 150,

153, 164, 201, 307, 343Constant elasticity of substitution (CES)

models, xivgrowth and, 435, 437increasing returns and, 106, 147market size and, 348–349, 353–357, 374






504 Subject Index

Constant elasticity of substitution (cont.)monopolistic competition and, 285, 322, 343public sector and, 149, 174

Consumerscities as interaction outcomes and,

193–202city-region agglomeration of firms and,

328–330clustering of retailers and, 263–269communication and, 187–188, 191–202,

204–206commuting costs and, 263–269core-periphery (CP) model and, 291–292emergence of cities in spatial economics

and, 388–391, 402–403, 404n4, 411, 419,421–423

formation of input centers and, 269–277globalization and, 466, 468growth and, 433–437, 452imperfect competition and, 235–269, 273,

276, 278, 280increasing returns and, 100, 102–105, 108,

110, 116, 130, 137–148land rent and, 62, 79–89, 92–98love for variety and, 242, 292, 336, 351–352,

389, 391–403, 410–411 (see also Variety)market size and, 348–356, 359–361, 364,

367, 368n9, 371–373, 379, 381mobility and, 104, 150–151, 166, 349monopolistic competition and, 285,

290–296, 299, 301, 305, 316–332, 335,344

preferences and, 29 (see also Preferences)public sector and, 150–177, 180–184residential problem and, 79secondary employment centers and,

271–277shopping and, 4, 143, 235–239, 250, 258,

262–269, 388spillovers and, 433–437symmetric distribution of, 154, 193, 196,

198Consumption

homogeneous spatial economy and,34–45

housing and, 90–91 (see also Housing)increasing returns and, 101, 106, 108, 115,

127, 130–131, 134–135, 142land rent and, 66, 78–83, 86–87, 89–90, 93,

95market size and, 351–352, 355, 369

monopolistic competition and, 285,291–292, 294, 303, 317–323, 326,331–332, 337, 342

nonrivalrous, 150, 189public sector and, 150, 153–154, 158, 164,

169, 175–176spatial impossibility theorem and, 32,

34–47, 52, 54, 59–61, 73, 100–101, 125,147, 236

Continuous land use theory, 94–96Core-periphery (CP) model

bell-shaped curve and, 331–336black hole condition and, 302, 310break point and, 304–305city-regions and, 322–331compensating losers and, 318–322criticism of, 288deindustrialization and, 432dispersion and, 286–290, 299, 304, 305n7,

315–322, 326, 330, 333–336elasticity of substitution and, 292, 294emergence of urban systems and, 421equilibrium and, 285–290, 293–336firms and, 285–298, 302, 306–308forward-looking behavior and, 310–315globalization and, 432, 455, 462growth and, 428–435, 451–452labor and, 316–318, 321–325, 331–333long-run equilibrium and, 297–298manufacturing and, 286–287, 290–295,

299–316, 322, 324, 326, 330–332market size and, 349, 354, 360, 370, 379monopolistic competition and, 285,

287–290, 293n1, 295, 298, 305–307,310–311, 315–316, 318, 321–336, 343

Pareto optimality and, 317–319, 321production and, 292–298, 320, 322,

330–331real wage and, 297–304, 311, 316–317, 324,

329regional divergence and, 287service sector and, 290short-run equilibrium and, 294–297, 299,

307spatial economy and, 291–298sustain point and, 302–305symmetric pattern and, 303–306transport costs and, 285–290, 293–298,

304–311, 315–318, 321–326, 329–336,343, 390

two-region case and, 298–306






Subject Index 505

urban systems and, 421variety and, 285, 291–294, 307–308,

317–323, 332–336Walras law and, 297, 320welfare and, 287–288, 315–322

Cross-commuting, 210–212, 215Cross-relocation, 39

Decentralizationcommunication and, 219, 230–232emergence of cities and, 411globalization and, 462growth and, 456imperfect competition and, 239, 271land rent and, 68, 75, 89monopolistic competition and, 331, 342public sector and, 154, 164, 167, 179urban employment and, 230–232

Deindustrialization, 334, 359, 362, 371, 427,431–432

Delivered price, 262, 308, 356, 404, 422Demand externalities, 239, 269, 388Density

central business district (CBD) and,202–204

communication and, 187–188, 194–198,201–204, 207–208, 211

emergence of cities and, 391, 403–404growth and, 427imperfect competition and, 241, 244,

247–251increasing returns and, 100, 111, 142land rent and, 59, 62–63, 79n9, 83–84, 92,

94–95market size and, 346n2optimal, 198–202population, 7, 62, 79n9, 83–84, 157, 170,

175, 187–188, 195–198, 201, 346n2public sector and, 153, 157, 169–170, 175

Detroit, 87, 91Developers, 391

communication and, 193, 203firms as, 101imperfect competition and, 269increasing returns and, 101, 103, 115, 118,

123–126, 132–133, 143, 148oligopolistic competition and, 53price mechanisms and, 53public sector and, 151–152, 154, 161–164,

166, 168, 178Differentiation, 30, 401, 419, 458

imperfect competition and, 236–237, 242,251–261, 264

increasing returns and, 109, 140market size and, 356, 359, 363, 367–368,

382monopolistic competition and, 291, 295,

301–304, 343, 350, 353Dispersion

centripetal forces and, 9, 17, 187, 191, 236,239, 263, 286, 429

communication and, 193, 205, 232core-periphery (CP) model and, 286–290,

299, 304, 305n7, 315–322, 326, 330,333–336

emergence of cities and, 389globalization and, 470growth and, 430, 451–452imperfect competition and, 242–243, 252,

258, 262–263, 272, 277, 279increasing returns and, 138, 140land rent and, 98market size and, 350, 362, 371, 374,

378–382monopolistic competition and, 286–290,

293n1, 299, 304, 305n7, 315–318,319–322, 326, 330, 333–336, 344

Pareto optimality and, 317–319, 321Walras law and, 320

Distance-decay effectequilibrium and, 192exponential function of, 192, 232, 242Hagerstrand and, 189information and, 90, 189, 192, 210, 219,

232, 242, 382, 438, 440intensity of, 210public goods and, 90spillover and, 382

Diversity, 390, 402Chamberlinan idea of, 101, 105communication and, 191, 230imperfect competition and, 255, 260increasing returns and, 101, 105, 133–136intercity trade and, 133–136monopolistic competition and, 335specialization and, 133–136 (see also

Specialization)Divisible activities

basic model of, 62–69equilibrium and, 75literature on, 78location of, 62–78






506 Subject Index

Divisible activities (cont.)monocentric economy and, 75neoclassical technologies and, 75–78technological linkages and, 69–75

Dixit-Stiglitz model, 54, 108, 285–286Downtowns, 9, 87

entropy and, 242household/store mixtures in, 242–248monopolistic competition and, 239–251opportunity of mixed, 248–251optimality of, 248–251

Duocentric configuration, 192, 219n13,222–230, 236–237

Duopoly model, 258

Ecological fallacy, 4Economic geography

cities and, 387 (see also Cities)growth and, xiii–xiv, 428imperfect competition and, 267increasing returns and, 106n5, 147market size and, 348, 353n6, 354n7, 374,

378monopolistic competition and, 286–288,

306motivations for observing agglomerations

and, 9nation unit and, 22–23new (NEG), 6n3, 23–25, 54, 63n6, 99, 133,

239, 279, 288–289, 298, 331, 344, 350,360, 367–368, 382, 460

price mechanism breakdown and, 55putty-clay, 37, 306, 378, 423spatial scale and, 2, 4, 6, 23–24, 54, 147,

279, 336, 383, 466, 471 (see also Spatialeconomics)

transport costs and, 5 (see also Transportcosts)

Elasticityconstant elasticity of substitution (CES)

models and, xiv, 91n16, 106, 108, 148,174, 242, 285, 292, 321, 343–344,348–349, 353–357, 374, 424, 434–435,438

emergence of cities and, 434–435growth and, 434–435imperfect competition and, 242, 254, 256,

277increasing returns and, 108–109, 138land rent and, 91n16market size and, 353–354

monopolistic competition and, 285, 292,294, 321, 327, 343–344

public sector and, 174Employment centers. See also Central

business district (CBD)communication and, 222formation of secondary, 271–277imperfect competition and, 235, 239,

271–277Endogeneity

communication and, 195–197, 202, 205, 232economic theory and, 19emerging cities and, 389growth and, 428, 434, 437imperfect competition and, 239, 250,

263n10, 265, 269increasing returns and, 100, 104, 110, 113,

114n9, 116, 127–128, 135, 138land rent and, 67, 69, 79, 92, 98market size and, 349, 351, 353, 355, 369,

373, 375, 382monopolistic competition and, 331–332, 334

Entropycommunication and, 210downtowns and, 242imperfect competition and, 242, 253, 256n8,

270information and, 210, 242, 253, 256n8, 270

Equilibriumclusters and, 263–269, 376–381communication and, 188, 191–232, 236–237Condorcet, 170–172core-periphery (CP) model and, 285–290,

293–336corner, 358cross-commuting and, 210–212, 215distance-decay effect and, 192duocentric configuration and, 192, 219n13,

222–230, 236–237duopolies and, 258emerging cities and, 388–422globalization and, 454–458, 465–466growth and, 429–431, 436–437, 441–445,

448–450home-market effect (HME) and, 357–360,

364–375homogeneous spatial economy and, 34–45imperfect competition and, 235, 237,

241–259, 262–277increasing returns and, 101–105, 108–146integrated cities and, 406–411






Subject Index 507

interior, 300, 358, 370, 377, 448intermediate goods and, 109land use and, 61–90, 93–97, 250long-run, 103, 113, 163, 297–298, 354,

365market size and, 347–351, 354–360,

364–381Marshallian externalities and, 13–14, 50–53,

81, 99, 101, 105, 106n5, 124monocentric cities and, 78–83monopolistic competition and, 285–290,

293–344multiplicity of, 222–223, 232, 304, 315number of firms and, 137–140number/size of cities and, 421–423polycentric cities and, 221–230population density and, 83, 119, 121,

159–163, 195–198public sector and, 152–166, 170–177, 181residential, 62, 78–87, 95–97, 116–118,

143, 153–154, 160–162, 175, 198,272–273, 323

short-run, 294–297, 299, 307, 354, 364spatial impossibility theorem and, 32,

34–47, 52, 54, 59–61, 73, 100–101, 125,147, 236

specialized cities and, 411–414steady-state, 299, 429, 441–450subgame, 170–172, 176, 252sustainability and, 395–400, 408symmetry and, 268 (see also Symmetry)urban systems structure and, 416–423utility and, 79, 82–85, 116, 199, 209voting, 152, 177wages and, 110, 112–113, 119, 127–128,

130, 215n9, 216, 274–275, 296, 303,319–320, 370, 445, 454, 465

zero-profit, 64, 98, 101–102, 113, 123, 128,164, 286, 293, 297–298, 332, 338, 373,395–397, 404–405, 440, 457, 465

Equityglobalization and, 470growth and, 430, 451increasing returns and, 141–142market size and, 381public sector and, 175trade-offs and, 451

European Union (EU), 3Evolutionary dynamics, 299, 310–315Externalities

agglomeration and, 13–16

communication and, 14, 189, 192n2,193–204, 208, 218n11, 232

consumer-interaction outcomes and,193–202

demand, 239, 269, 388economic theory and, 8–9, 13–16, 24emerging cities and, 388heterogeneous space and, 47–52homogeneity and, 47–52imperfect competition and, 235, 239,

268–269, 278increasing returns and, 99, 106n5, 112, 124,

128, 132, 136land rent and, 62, 67, 85market size and, 360, 375, 383Marshallian, 13–14, 50–53, 81, 99, 101,

105, 106n5, 124monocentric cities and, 213, 215, 221monopolistic competition and, 285,

287–288, 306, 312pecuniary, 14–15, 24, 285, 287, 306, 360,

383price mechanisms and, 30, 32, 47–55spatial, 32, 52, 62, 124, 193–204, 208spillovers and, 14 (see also Spillovers)

External scale economies, 99–100, 116,127

Factor mobility, 15, 24, 306Factory towns, 4, 101, 105, 115–119,

122–123, 132Farmers. See AgricultureFirms

aggregate accessibility and, 208, 211, 215,237

back unit, 228central business district (CBD) and, 78,

202–204 (see also Central businessdistrict (CBD))

cities as, 115–120city-region agglomeration of consumers

and, 322–331communication and, 187–193, 197,

202–223, 226, 230–233, 237–238core-periphery (CP) model and, 285–298,

302, 306, 308as developer, 101efficiency of agglomeration and, 260–262emergence of cities and, 387–392,

395–400, 404–408, 413–414, 416,418–424






508 Subject Index

Firms (cont.)fixed costs and, 10, 109, 112, 134, 140–145,

173, 243, 264, 307, 332, 373, 428, 433,436, 467–469

formation of input centers and, 269–279fragmentation and, 31, 347, 426, 430–432,

453–454, 457, 460–466, 471front unit, globalization and, 453–470growth and, 426–441, 444headquarters (HQ) and, 193, 271, 290, 431,

453–456, 462, 466–468heterogeneity and, 363–368home-market effect (HME) and, 357–375homogeneous spatial economy and, 34–45horizontal investment and, 453, 467–469imperfect competition and, 235–281increasing returns and, 99–119, 122–128,

130, 132–148interfirm mobility and, 208intermediate goods and, 107 (see also

Intermediate goods)intrafirm communication costs and, 193,

219, 457land rent and, 68–69location and, 346, 358–360 (see also

Location)market size and, 346–383mixed downtowns and, 242–251monopolistic competition and, 285–298,

302, 306–308, 316, 318–320, 322–344multinational, 271, 374, 431–432, 453–460,

464–470multiunit, 193oligopolistic competition and, 251–263optimal size of, 102optimum spatial distribution of, 140–142price mechanisms and, 29–57public sector and, 156, 164–165, 167, 178quadratic assignment problem and, 32–34,

39, 47, 51n8, 55, 60, 73–74retailers and, 6, 100, 235, 237–238, 248,

251–269secondary employment centers and,

271–277shopping centers and, 263–269spatial equilibrium and, 137–140spatial impossibility theorem and, 32,

34–47, 52, 54, 59–61, 73, 100–101, 125,147, 236

spatial interaction theory and, 15, 210,256

spillovers and, 433–437symmetry and, 206–207, 354–355variety and, 235–242, 251–270, 278vertical linkages and, 342, 390, 409worker spatial interdependence and,

205–211First-best analysis

imperfect competition and, 248increasing returns and, 102, 143, 145–147market size and, 361, 379–382public sector and, 152, 157

Footloose capital (FC) model, 351, 373–374Foreign direct investment (FDI), 466, 468Forward-looking behavior, 310–315Free entry, 54, 203, 261, 404, 440

imperfect competition and, 261increasing returns and, 101, 112, 130, 140,

145land rent and, 61, 98market size and, 357monopolistic competition and, 286, 293,

295, 308, 324public sector and, 152, 163

Freight absorption, 356

Gini indices, 335Globalization

agglomeration and, 453–454, 460, 462–463,470

alternative strategies of multinationalizationand, 466–470

central business district (CBD) and, 462clusters and, 463competition and, 453, 458–460, 465, 471complex integration and, 468–469consumers and, 466, 468core-periphery (CP) model and, 432, 456,

462decentralization and, 462deindustrialization and, 432dispersion and, 470equilibrium and, 454–458, 465–466equity and, 470firms and, 453–470fragmentation and, 430–431, 453–454, 457,

460–466, 471heterogeneity and, 455n8, 458homogeneity and, 454, 455n8, 468increasing returns and, 453, 468information and, 455, 463, 469, 471innovation and, 470–471






Subject Index 509

intermediate goods and, 467, 469investment and, 453, 467–470land use and, 462, 471location and, 453, 455, 460–471manufacturing and, 453–456, 464, 467, 470markets and, 453–454, 458, 460, 463,

466–470offshoring and, 432, 453–460, 463–467, 469optimality and, 462outsourcing and, 469political debate and, 430profit and, 456–457, 460, 465–466, 469proximity and, 467research and development (R&D) and, 454,

470returns to scale and, 453scale economies and, 453shipping and, 453, 467, 469specialization and, 454, 459, 470spillovers and, 426symmetry and, 454technology and, 453, 463, 471trade-offs and, 467–468transport costs and, 458–470variety and, 453, 456wages and, 454–457, 460–465, 469–471welfare and, 463, 465zero-profit condition and, 457, 465

Gravity, 238, 256, 267, 294, 346, 357Greece, 3Gross domestic product (GDP), 3, 346n3Growth

agglomeration and, 427–432, 442–453, 470capital flow and, 430causality and, 429centripetal forces and, 429clusters and, 427communication and, 189, 192n2, 219, 232competition and, 428, 432, 434–437congruence of talents and, 427–428core-periphery (CP) model and, 428–435,

451–452decentralization and, 456density and, 427dispersion and, 430, 451–452dynamics of, 443–450emergence of urban systems and, 416–423endogeneity and, 428, 434, 437equilibrium and, 429–431, 436–437,

441–445, 448–450equity and, 430, 451

firms and, 426–441, 444forward-looking behavior and, 310–315fragmentation and, 426, 430–432globalization and, 471 (see also

Globalization)heterogeneity and, 432historical perspective on, 3, 428homogeneity and, 433–435imperfect competition and, 238increasing returns and, 114, 118, 124, 131,

133, 135, 438industry and, 431information and, 426, 431, 437innovation and, 427–430, 433, 437–439investment and, 430–432land rent and, 84localized, 2, 137, 139, 168, 221, 238,

427–428, 438, 471location and, 426–435, 441, 446–448manufacturing and, 426–429, 433–436,

440–444, 449–453markets and, 346, 349, 379, 428–432,

435–436, 440mobility and, 440, 451monocentric economy and, 400–402monopolistic competition and, 286,

295–296, 323, 428optimality and, 430, 447patents and, 428–429, 433–440, 443, 450perfect competition and, 434population, 390, 400–402, 410, 414, 416,

423 (see also Population growth)preferences and, 433, 435primacy trap and, 410–411, 416production and, 428, 430–435, 437–443public sector and, 157, 166regional, 426–430, 433–442, 449, 470research and development (R&D) and,

427–429, 432–433, 435, 437–442,449–452

resources and, 427returns to scale and, 427role of cities and, 428Solow model and, 21, 79n10, 96–97, 157specialization and, 427–428spillovers and, 14, 17, 101, 114–115, 166,

189, 191, 192n2, 208, 221, 232, 381–383,426, 429, 433–442, 449, 452

steady-state (ss), 442–450sustainability and, 449symmetry and, 439, 448–452






510 Subject Index

Growth (cont.)technology and, 426–432, 437trade-offs and, 451transport costs and, 429–433, 449–453utility and, 433–435, 441–442, 445–448,

451variety and, 428, 433–436, 439–440, 442wages and, 430–432, 435, 440–441,

444–448wealth and, 426–427, 435welfare and, 426, 430, 442, 452–453zero-profit condition and, 440

Headquarters (HQ), 193, 271, 290, 431,453–456, 462, 466–468

Heckscher-Ohlin model, 52, 351, 354, 368Henderson, Vernon, 25Henry George Theorem

increasing returns and, 122–123, 125, 145,147

public sector and, 154–157, 163–164, 167,177

Herfindahl index, 352n4Heterogeneity

communication and, 206, 210, 221cost and, 363–366firms and, 363–368globalization and, 455n8, 458growth and, 432home-market effect (HME) and, 363–367imperfect competition and, 258, 261increasing returns and, 105–106, 110–111,

113, 137, 148land rent and, 61, 83, 97market size and, 349, 357n8, 363–368,

375monopolistic competition and, 305, 334quality, 367–368

Hicksian analysis, 18, 81, 116, 127, 318, 321,354

Home market effect (HME)equilibrium and, 357–360, 364–375firm location and, 358–360full agglomeration and, 360general equilibrium and, 368–375heterogeneity and, 363–367location of nontradables and, 362–363market size and, 357–363one-sector economy and, 368–372partial agglomeration and, 358–360transport costs and, 359, 366, 372–374

Homogeneitycommunication and, 187, 193, 205, 232emerging cities and, 402–403, 411, 417externalities and, 47–52globalization and, 454, 454n8, 468growth and, 433–435imperfect competition and, 236–237, 240,

251, 255, 257, 260, 262, 269, 272increasing returns and, 99, 106, 115land rent and, 45–46, 60–61, 73–78, 81–83,

97market size and, 348–349, 353, 360, 362,

364–365, 371, 373, 382monopolistic competition and, 286,

290–291, 337public sector and, 149, 152, 179spatial impossibility theorem and, 32,

34–47, 52, 54, 59–61, 73, 100–101, 147,215, 236

Horizontal investment, 453, 467–469Households

communication and, 187–188, 191, 193,205–213, 216, 230, 232, 237

homogeneous spatial economy and, 34–45imperfect competition and, 236, 240,

242–248, 250land rent and, 78, 81, 87–94market size and, 347mixed downtowns and, 242–248monopolistic competition and, 288, 322,

332Housing

accessibility and, 78–83communication and, 191–192, 198, 202,

205–206, 209, 211–215, 221, 223,226–227, 236–237

emergence of cities and, 423imperfect competition and, 244, 250,

272–273, 279increasing returns and, 101, 110, 116–118,

122, 126, 128, 133n18, 135, 143land rent and, 61–62, 78–79, 83–84, 85n13,

89–98monopolistic competition and, 288, 334price mechanisms and, 31public sector and, 153–154, 158–164, 167,

175, 178residential equilibrium and, 62, 78–87,

95–97, 116–118, 143, 153–154, 160–162,175, 198, 272–273, 323

Hukou system, 133n18






Subject Index 511

Iceberg transport cost, 40–43, 63n6, 453emergence of cities and, 403, 422market size and, 354monopolistic competition and, 286, 289,

293–294, 323, 338, 343–344Imperfect competition

accessibility and, 243, 247–248, 251, 257n9,261, 268, 271, 274

agglomeration and, 235–239, 243–244,247n4, 251–253, 256–263, 268–272,278–279

agriculture and, 250bid rent function and, 240, 243–244, 250,

273, 275central business district (CBD) and, 235,

239, 269, 271–277centrifugal forces and, 258, 262–263centripetal forces and, 236, 239, 263clusters and, 235–239, 256–257, 261–269,

278, 281–282commuting costs and, 272–275, 277composite good and, 272decentralization and, 239, 271density and, 241, 244, 247–251developers and, 269dispersion and, 242–243, 252, 258,

262–263, 272, 277, 279diversity and, 255, 260duopolies and, 258elasticity of substitution and, 242, 254, 256,

277employment centers and, 235, 239, 271–277endogeneity and, 239, 250, 263n10, 265,

269entropy and, 242, 253, 256n8, 270equilibrium and, 235, 237, 241–259,

262–278externalities and, 235, 239, 268–269, 278firms and, 235–281first-best analysis and, 248formation of downtown and, 239–251formation of input centers and, 269–279growth and, 238heterogeneity and, 258, 261homogeneity and, 236–237, 240, 251, 255,

257, 260, 262, 269, 272households and, 236, 239, 242–248, 250increasing returns and, 148, 235, 240, 270information and, 238, 251, 263, 272, 278innovation and, 259integrated districts and, 244, 246–248, 271

intermediate goods and, 269–270, 278land use and, 236, 240–243, 247–250, 262,

269–277logit model and, 256n8, 258market size and, 269, 271–272, 382matching and, 258, 263, 265–267, 269mixed downtowns and, 242–248monocentric cities and, 272–273, 278monopolistic competition and, 235–236,

239–251, 254, 262, 269, 279, 306oligopolistic competition and, 53–54,

237–238, 242, 251–263opportunity cost and, 240, 273optimality and, 235–236, 241, 248–251,

260–261, 265, 279preferences and, 237–242, 251–261, 266,

270price mechanisms and, 53–55, 235–238,

241–242, 248–265, 268–270, 273, 278,280

principle of minimum differentiation and,236, 252, 258

proximity and, 251, 255, 262, 277residential equilibrium and, 272–273retailers and, 235, 237–238, 248, 251–269secondary employment centers and,

271–278shipping and, 237–238, 262–263shopping and, 235–239, 250, 258, 262–263,

265, 268–269spatial competition and, 236–239, 251–263,

279spatial impossibility theorem and, 236spatially discounted accessibility and, 243specialization and, 244, 272symmetry and, 240–241, 243–244, 248,

258, 260, 268, 275, 277trade-offs and, 239, 252, 264transport costs and, 237, 251–252, 258, 261,

263, 265–267, 271, 278, 281two ice-cream men problem and, 236–237urbanization and, 239variety and, 235–242, 251–270, 278wages and, 239, 272–278zero-profit condition and, 286, 293,

297–298, 332, 338Increasing returns

accessibility and, 142, 145, 151agglomeration and, 10–13, 99–100, 103n1,

105, 112, 114–115, 121, 124, 126, 128,130, 134, 136, 140, 148






512 Subject Index

Increasing returns (cont.)agriculture and, 117–118, 120, 123, 148amenities and, 132bid rent function and, 116causality and, 130central business district (CBD) and, 99–101,

107, 110–113, 127–128, 148city as firm and, 115–120city size and, 114–125clusters and, 103, 136–137, 140coagglomeration of intermediate and final

sectors, 407Coase Theorem and, 115community and, 103, 105, 115, 120–122,

125, 146commuting costs and, 99, 101, 103, 105,

110, 113, 116, 118, 120, 126, 129,131–135

comparative advantage and, 100, 135competition and, 99–108, 111–113,

115–116, 118, 122–128, 132, 137–146,147–148

density and, 100, 111, 142developers and, 101, 103, 115, 118,

123–126, 132–133, 143, 148dispersion and, 138, 140diversity and, 101, 105, 133–136emergence of urban systems and, 421, 427endogeneity and, 100, 104, 110, 113, 114n9,

116, 127–128, 135, 138equilibrium and, 101–105, 108–146equity and, 141–142exogeneity and, 100, 123externalities and, 99, 106n5, 112, 124, 128,

132, 136external scale economies and, 99–100, 116,

127firms and, 99–119, 122–128, 130, 132–148first-best analysis and, 102, 143, 145–147globalization and, 453, 468growth and, 114, 118, 124, 131, 133, 135,

438Henry George Theorem and, 122–123, 125,

145, 147, 154–157, 163–164, 167, 177heterogeneity and, 105–106, 110–111, 113,

137, 148homogeneity and, 99, 106, 115households and, 142housing and, 101, 118, 126, 133n18, 135imperfect competition and, 103, 148, 235,

240, 270

Industrial Revolution and, 140industry and, 100, 105, 107–108, 124–129,

133–134, 137, 141, 146information and, 100–101, 105–106, 114,

118innovation and, 114, 136intercity trade and, 125–137intermediate goods and, 105–114, 132, 134internal, 99land capitalization and, 102, 104, 142–145,

147land use and, 99–105, 110, 115–128,

132–135, 142–148learning and, 100–101, 105–106, 114, 136local government and, 103, 120, 126, 128,

132–133location and, 102, 104, 117–118, 128,

133–134, 137–138, 142–143, 147–148manufacturing and, 135market organization and, 137–146market size and, 101, 108, 346–347, 351,

354, 359, 381–382matching and, 100–101, 105, 110–113micro-foundations of external, 105–114mobility and, 10, 104, 125, 133n18, 135monocentric cities and, 107, 111, 115, 118monopolistic competition and, 108,

285–287, 290–292, 298, 306, 323, 332,337, 342

optimality and, 102, 104, 123, 132, 141,144–145

perfect competition and, 106, 125, 147price mechanisms and, 31–32, 49–50,

53–54, 99, 102–104, 106–108, 111, 115,118–119, 123, 127–129, 134–136

production and, 99–116, 120–123, 125–128,130, 132–134, 136–138, 140–141, 147

proximity and, 104, 148public goods and, 100, 104, 106n5, 122n13,

133, 149residential equilibrium and, 116–117, 143retailers and, 100returns to scale and, 103n1, 107, 109–111,

121, 127–128Ricardian comnparative advantage and, 100,

135scale economies and, 99–105, 114–127,

130–132sharing and, 100–102, 105–110spatial competition and, 99, 103–106, 111,

137, 140–143, 146–147






Subject Index 513

spatial impossibility theorem and, 100–101,125, 147

specialization and, 100, 105–110,125–136

spillovers and, 101, 114–115sustainability and, 114n9symmetry and, 108, 111n7taxes and, 115, 122, 133n18, 145technology and, 104, 106–107, 110, 127,

129, 136, 140transport costs and, 10–11, 101, 105, 126,

132–134, 137, 140–142, 145urban systems and, 103, 105, 124–125, 127,

129, 132–134variety and, 100, 106–107wages and, 99–102, 105–113, 116–119,

122–126welfare and, 115, 124, 129zero-profit condition and, 101–102, 113,

123, 128Industrial Belt, 287Industrial Revolution

communication and, 189, 219increasing returns and, 140land rent and, 74, 84transport costs and, 2–3, 5

Industrycentral business district (CBD) and, 78

(see also Central business district(CBD))

clusters and, 349–350, 375–382coagglomeration of upstream/downstream,

336–342communication and, 190, 221competition and, 153 (see also Competition)deindustrialization and, 334, 359, 362, 371,

427, 431–432emergence of cities and, 389, 402, 407, 417,

421, 424globalization and, 456, 469n10growth and, 431increasing returns and, 100, 105, 107–108,

124–129, 133–134, 137, 141, 146input-output linkages and, 389–390intermediate sector and, 336–338land rent and, 92market size and, 348multinational firms and, 271, 374, 431–432,

453–460, 464–470 (see also Firms)price mechanisms and, 50–51, 54public sector and, 153

Informationaggregate accessibility and, 208, 211, 215,

237codified, 190communication and, 188–193, 204–210,

220–221, 230–232cross-commuting and, 210–212, 215distance-decay effect and, 90, 189, 192, 210,

219, 232, 242, 382, 438, 440entropy and, 210, 242, 253, 256n8, 270globalization and, 455, 463, 469, 471growth and, 426, 431, 437Hagerstrand and, 189imperfect competition and, 238, 251, 263,

272, 278increasing returns and, 100–101, 105–106,

114, 118land rent and, 62n3linear accessibility and, 192, 210–213,

218–221, 226–227, 236–237as nonrival good, 189price mechanisms and, 29public sector and, 177spatially discounted accessibility and,

210–211, 221–223, 237, 243spillovers and, 189 (see also Spillovers)symmetry and, 206tacit, 189–190, 429

Innovationcommunication and, 190, 208globalization and, 470–471growth and, 427–430, 433, 437–439imperfect competition and, 259increasing returns and, 114, 136patents and, 190, 428–429, 433–440, 443,

450public sector and, 179

Input centersformation of, 269–279secondary employment centers and,

271–278upstream/downstream firms and, 269–271

Integrated districtscommunication and, 213, 215, 221imperfect competition and, 244, 246–248,

271Intercity trade, 387

diversity and, 133–136increasing returns and, 125–136monopolistic competition and, 289, 306, 331specialization and, 125–136






514 Subject Index

Intermediate goodscoagglomeration of final sector and,

402–416coagglomeration of upstream/downstreamindustries and, 336–338communication and, 218n11emergence of cities and, 389, 402–405, 409equilibrium and, 109formation of input centers and, 269–279globalization and, 467, 469imperfect competition and, 269–270, 278increasing returns and, 105–114, 132, 134land rent and, 60–61, 69–70, 74–75, 87monopolistic competition and, 290, 336–342

International trade theory, 10, 20, 125Intrafirm communication costs, 193, 219, 457Investment

globalization and, 453, 467–470growth and, 430–432horizontal, 453, 467–469increasing returns and, 99, 140, 142 (see

also Increasing returns)land rent and, 91market size and, 347, 351, 368–369,

372–373Isolated State (von Thunen), 388

Journal of Economic Theory, 97Jurisdictional issues

cities and, 4, 150–151, 164, 168–177, 179,323

community formation and, 169–173land capitalization and, 175–177number/size of jurisdictions and, 168–177public goods and, 150–151, 164, 168–177,

179

Knowledgecapital, 433, 437–440transfer of, 114n9, 426 (see also Spillovers)

Laboragriculture and, 389 (see also Agriculture)communication and, 187, 191, 193,

205–212, 214, 218–223, 233, 236core-periphery (CP) model and, 316–318,

321–325, 331–333economic theory and, 3, 7–15, 18, 21, 23–24emergence of cities and, 389–418, 421,

423–424firm spatial interdependence and, 205–211

forward-looking behavior and, 310–315globalization and, 432, 453–469growth and, 428–442, 445–452Henry George Theorem and, 122–123, 125,

145, 147, 154–157, 163–164, 167, 177imperfect competition and, 235, 239,

271–279increasing returns and, 99–138, 148intermediate goods and, 107, 109 (see also

Intermediate goods)international division of, 3interregional mobility and, 23, 343, 440land rent and, 61, 63n5, 69, 75–79, 89, 92market size and, 346, 349, 351, 354,

360–361, 363, 369–374matching and, 110–113migrant, 84, 101, 132, 133n18, 274–278,

297, 310, 312, 434, 441–442mobility and, 286–291 (see also Mobility)monopolistic competition and, 285, 288,

290–292, 295–298, 307, 316, 318,321–325, 331–333, 336–338, 342–344

offshoring and, 432, 453–460, 463–467, 469outsourcing and, 469price mechanisms and, 31, 35, 41–44, 49–51primacy trap and, 410–411, 416public sector and, 164–165secondary employment centers and,

271–277self-sufficiency and, 11, 218, 411skilled, 13, 17, 31, 110–112, 136, 189, 309,

419–427social division of, 8spatial impossibility theorem and, 32,

34–47, 52, 54, 59–61, 73, 100–101, 125,147, 236

specialization and, 7technology and, 5, 7unskilled, 307, 342, 428–437, 440,

451–456, 462–466, 470variety and, 305wages and, 11, 16 (see also Wages)welfare and, 321–322, 414–416 (see also

Welfare)Land capitalization

increasing returns and, 102, 104, 142–145,147

limits of, 164–168public sector and, 150, 161, 164–168,

175–178role of, 175–178






Subject Index 515

Land quasi-rent, 176–177Land rent

accessibility and, 60, 75, 78–79, 83, 89agglomeration and, 84, 98aggregate, 68, 98, 126–127, 143, 157, 323,

332agriculture and, 59–60, 63–64, 66, 69, 82,

84–85, 87, 92–94amenities and, 62, 87, 90–94bid rent function and, 61, 64–73, 76, 79–82,

86–87, 90, 92–98budget constraints and, 79central business district (CBD) and, 78–84,

88–89, 93, 95–96, 98clusters and, 89communication and, 188, 191, 198,

205–206, 209, 219commuting costs and, 62, 79–89, 93, 95,

98competition and, 59–61, 63–64, 67–68, 71,

75, 78, 84–85, 88, 97composite good and, 79–83, 86, 90, 94–95consumers and, 62, 79–89, 92–98consumption and, 66, 78–83, 86–87, 89–90,

93, 95decentralization and, 68, 75, 89density and, 59, 62–63, 79n9, 82–84, 92,

94–95differential, 60, 82, 102, 104–105, 117,

122–123, 145, 147, 152, 154–164,167–168, 175, 178

dispersion and, 98distance-decay effects and, 90economic theory and, 24emergence of cities and, 393, 401, 406endogeneity and, 67, 69, 79, 92, 98equilibrium and, 61–90, 93–97exogeneity and, 60, 90–91, 98externalities and, 62, 67, 85globalization and, 462growth and, 84Henry George Theorem and, 122–123,

125, 145, 147, 154–157, 163–164, 167,177

heterogeneity and, 61, 83, 97homogeneity and, 45–46, 60–61, 73–78,

81–83, 97housing and, 61, 78–79, 82–84, 85n13,

89–91, 98imperfect competition and, 241, 248,

272–277

increasing returns and, 99–105, 115, 117,122–123, 125–127, 132, 142–147

Industrial Revolution and, 74, 84industry and, 92intermediate goods and, 60–61, 69–70,

74–75, 87investment and, 91labor and, 61, 63n5, 69, 75–79, 89, 92land as free good and, 60location and, 59–66, 68–70, 74, 76–87,

90–92, 95, 97manufacturing and, 69markets and, 59–71, 74, 78–79, 82–84,

97–98monocentric cities and, 61, 75, 78–83, 94,


332–334neoclassical models and, 88n14opportunity cost and, 63, 67, 83–85, 89, 95optimality and, 67–68, 75, 90, 96n20, 97perfect competition and, 60population constraint and, 86price mechanisms and, 36, 38–39, 42,

45–46, 50, 59–71, 74, 78–83, 85, 89,93–96

production and, 60–61, 63, 66, 69–70,74–78, 88n14, 98

proximity and, 60, 81public sector and, 151–169, 175–178quadratic assignment problem and, 60,

73–74residential equilibrium and, 62, 78–87,

95–97shipping and, 63n6, 71, 74–75social stratification and, 87–94spatial impossibility theorem and, 59–61,

73specialization and, 65–66, 69, 74, 77–78substitution and, 61, 75–78, 91n16, 93sustainability and, 81technology and, 60, 63, 65, 69–78, 84, 95,

98transport costs and, 59–60, 63, 65–66, 68,

70, 73–74, 78urban, 62, 78–97von Thunen model and, 59–79, 82–83, 87,

97n22, 98wages and, 64n7, 69, 76–77welfare and, 75, 85, 97zero-profit condition and, 64, 98






516 Subject Index

Land use. See also Agriculturebid rent function and, 61, 64–73, 76, 79–82,

86–87, 90, 92–98central business district (CBD) and,

202–204 (see also Central businessdistrict (CBD))

collective ownership and, 157–158communication and, 187–188, 191–211,

214–215, 218–221, 238continuous land use theory and, 94–96developers and, 101, 103, 115, 118,

123–126, 132–133, 143, 148 (see alsoDevelopers)

emergence of cities and, 389–395, 400–406,423

equilibrium and, 250globalization and, 462, 471housing and, 31 (see also Housing)imperfect competition and, 236, 240–243,

247, 250, 262, 269–277increasing returns and, 99–105, 110,

115–128, 132–135, 142–145, 147–148monocentric cities and, 211monopolistic competition and, 288–290,

322–323, 331–334neoclassical model of, 88n14public sector and, 150, 153–170, 175–178spatial competition and, 104 (see also

Spatial competition)spatial impossibility theorem and, 32,

34–47, 52, 54, 59–61, 73, 100–101, 125,147, 236

spatial interdependence and, 205zones and, 2, 66, 77, 88, 92, 266

Landlords, 66, 69, 98, 133, 194, 205, 206n5,221, 240, 400–402, 410, 414–415

Learningcommunication and, 191, 221by doing, 136increasing returns and, 100–101, 105–106,

114, 136Marshall and, 105–106from others, 114, 136, 191, 221scale effect and, 114

Linear accessibility, 192, 210–213, 218–221,226–227, 236–237

Local governmentcities and, 53, 103, 120, 126, 128, 132–133,

158, 166–168, 178, 193, 391communication and, 193

Henry George Theorem and, 154–157,163–164, 167, 177

increasing returns and, 103, 120, 126, 128,132–133

jurisdictional issues and, 4, 150–152, 164,168–177, 179, 323

public goods and, 154–157 (see also Publicgoods)

public sector and, 158, 166–168, 178Localization economies, 124, 349–350,

375–376, 379, 381–382Location

aggregate accessibility and, 208, 211, 215,237

central business district (CBD) and, 78 (seealso Central business district (CBD))


communication and, 187–195, 198–222,230–236

cross-location and, 39divisible activities and, 62–78economic theory and, 1, 4–13, 16n11, 19–24emergence of cities and, 301, 387–389,

393–395, 398–400, 403–405, 408–413,416–419, 422–423

globalization and, 453, 455, 460–471growth and, 426–435, 441, 446–448home-market effect (HME) and, 357–375imperfect competition and, 235–243,

247–274, 277–278increasing returns and, 102, 104, 117–118,

128, 133–134, 137–138, 142–143,147–148

integrated districts and, 213, 215, 221, 244,246–248, 271

isolated state and, 97n22land rent and, 59–70, 74, 76–87, 90–92, 95,

97land without, 151market area effect and, 252, 259, 262–264,

347market size and, 346–348, 350, 353–354,

358–363, 366, 368, 370–375, 378,380–383

monopolistic competition and, 294,298–299, 302, 306–307, 315, 318, 323,331, 334, 336, 343

nontradables and, 362–363price mechanisms and, 29–36, 39–51, 55–58






Subject Index 517

public sector and, 150–154, 157, 161,164–171, 175–179, 182–184

quadratic assignment problem and, 32–34,39, 47, 51n8, 55–58, 60, 73–74

relative position and, 148, 167, 383residential equilibrium and, 62, 78–87,

95–97, 116–117, 143, 153–154, 160–162,175, 198, 272–273, 323

shopping centers and, 263–269spatial competition and, 104 (see also

Spatial competition)spatial impossibility theorem and, 32,

34–47, 52, 54, 59–61, 73, 100–101, 125,147, 236

spatial interaction theory and, 15, 210, 256symmetry and, 260 (see also Symmetry)technological linkages and, 69–75two ice-cream men problem and, 236–237von Thunen model and, 59–77

Logit model, 256n8, 258London, 4, 7–8, 15–16, 90, 110, 133, 427Long-run equilibrium, 103, 113, 163,

297–298, 354, 365Love for variety. See also Variety

consumers and, 242, 292, 336, 351–352,389, 391–403, 410–411

imperfect competition and, 242market size and, 351–352monopolistic competition and, 292, 336oligopolistic competition and, 251–260spatial competition and, 251–263

Manufacturingcity reformation under preference for

variety and, 391–400coagglomeration of intermediate and final

sectors and, 402–414communication and, 189, 219core-periphery (CP) model and, 286–287,

290–295, 299–316, 322, 324, 326,330–332

economic theory and, 3, 5–6, 15–17emergence of cities and, 389, 391–414,

421–424forward-looking behavior and, 310–315globalization and, 453–456, 464, 467, 470growth and, 426–429, 433–436, 440–444,

449–453increasing returns and, 135land rent and, 69

market size and, 348, 351–353, 359,362–363, 368–375

monopolistic competition and, 286–287,290–295, 299–316, 322, 324, 326,330–342

optimal size of cities and, 12, 16n10, 151,157

von Thunen model and, 388n1, 389Manufacturing Belt, 15, 348Market-access effect, 347, 359–360, 371, 382Market area effect, 252, 259, 262–264, 347Market-crowding effect, 347, 359–360Market potential theory, 346–348, 375, 382Markets

accessibility and, 46, 49, 375, 382communication and, 187–193, 198,

201–211, 214, 220–223, 230–233economic theory and, 9, 11–15, 19, 21–22,

24emerging cities and, 387–390, 393–394,

399, 402, 405–406, 412, 416, 423failures of, 55, 75, 125, 178, 198, 220formation of input centers and, 269–279globalization and, 453–454, 458, 460, 463,

466–470growth and, 428–432, 435–436, 440home-market effect (HME) and, 357–375imperfect competition and, 235–242 (see

also Imperfect competition)increasing returns and, 99–110 (see also

Increasing returns)intercity trade and, 125–137, 289, 306, 331,

387intermediate goods and, 269–270, 278 (see

also Intermediate goods)land as free good and, 60land rent and, 59–71, 74, 78–79, 83–84,

97–98monopolistic competition and, 285 (see also

Monopolistic competition)public sector and, 150, 154, 157–158, 161,

163–165, 169, 172–179secondary employment centers and,

271–278shopping and, 4, 143, 235, 237–239, 250,

258, 262–263, 265, 268–269, 388shopping models and, 236–238, 262–263spatial organization of, 137–146tariffs and, 6, 237, 468von Thunen model and, 59–71, 74






518 Subject Index

Market sizeagglomeration and, 349–350, 358–362, 365,

371, 374, 378–383agriculture and, 351–353, 359, 368,

372–374capital share and, 348–349causality and, 370clusters and, 349–350, 375–382comparative advantage and, 359–360, 368competition and, 347–366, 370, 372–375,

379–382core-periphery (CP) model and, 349, 354,

360, 370, 379density and, 346n2dispersion and, 350, 362, 371, 374, 378–382endogeneity and, 349, 351, 353, 355, 369,

373, 375, 382equity and, 381exogeneity and, 351, 357, 373externalities and, 360, 375, 383first-best analysis and, 361, 379–382footloose capital (FC) model and, 351,

373–374freight absorption and, 356growth and, 346, 349, 379Heckscher-Ohlin model and, 351, 354, 368heterogeneity and, 349, 357n8, 363–368,

375home-market effect (HME) and, 357–375homogeneity and, 348–349, 353, 360, 362,

364–365, 371, 373, 382households and, 347imperfect competition and, 269, 271–272,

382increasing returns and, 101, 108, 346–347,

351, 354, 359, 381–382industry and, 348, 372–375investment and, 347, 351, 368–369,

372–373localization economies and, 349–350,

375–376, 379, 381–382location and, 346–348, 350, 353–354,

358–363, 366, 368, 370–375, 378,380–383

manufacturing and, 348, 351–353, 359,362–363, 368–375

mobility and, 349, 357, 373, 382monopolistic competition and, 348–357,

360, 373, 375, 382numeraire and, 351–353, 369, 373oligopolistic competition and, 353n6

one-sector economy and, 368–372optimality and, 12, 16n10, 151, 157, 346,

362, 380–381perfect competition and, 347, 372proximity and, 347–348, 350, 365, 374–375public sector and, 172returns to scale and, 347Ricardian comparative advantage and, 359scale economies and, 347, 359secondary employment centers and,

271–278shipping and, 347–348, 353, 356, 361, 368,

372–374, 382social surplus and, 66, 68, 150, 360–361spatial competition and, 347, 356, 360specialization and, 348–349, 359spillovers and, 381–383symmetry and, 350, 354–355, 360,

364–366, 374–382trade flows and, 354–357trade-offs and, 347, 374, 381transport costs and, 346–350, 354, 359, 366,

372–374, 380–382variety and, 351–355, 367–368wages and, 349, 351, 368–374, 381welfare and, 360–361, 379–380zero-profit condition and, 373

Marshallian externalities, 13–14, 50–53, 81,99, 101, 105, 106n5, 124

Matchingcentral business district (CBD) and,

110–113imperfect competition and, 258, 263,

265–267, 269increasing returns and, 100–101, 105,

110–113labor and, 110–113

Megalopolises, 15, 103, 398, 400Metropolitan structures, 3–4

concept of, 7n4population density and, 7, 62, 79n9, 83–84,

157, 170, 175, 187–188, 195–198, 201,346n2

Microstatics (Vickrey), 146Migration, 133n18, 219, 272

emergence of cities and, 400, 417–418growth and, 428–429, 435, 441–450land rent and, 79, 84monopolistic competition and, 285,

297–298, 305, 306n8, 310–315, 343public sector and, 159, 167






Subject Index 519

Mill price, 237, 241–242, 254, 344, 356, 436,456

Mobilityagriculture and, 286comparative advantage and, 52consumer, 104, 150–151, 166, 349costs of, 2, 289factor, 10–11, 15, 24, 125, 285–291, 301,

306, 313, 322, 334, 336, 342–343, 349,357, 373, 382

growth and, 440, 451immobility and, 52, 286, 291, 322, 349increasing returns and, 10, 104, 125,

133n18, 135interfirm, 208interregional, 23, 343, 440market size and, 349, 357, 373, 382monopolistic competition and, 286–291,

301, 306, 313, 322, 334, 336, 342–343perfect, 11price mechanisms and, 52public sector and, 150–151, 166

Monocentric citiescentral business district (CBD) and, 219communication and, 192, 211–227, 232–233emergence of, 389–402, 407, 410–411, 414,

416–420imperfect competition and, 272–273, 278increasing returns and, 107, 111, 115, 118integrated districts and, 213, 215, 221land rent and, 61, 75, 78–83, 94, 97monopolistic competition and, 288, 322residential equilibrium and, 78–83spatial equilibrium and, 399–400welfare and, 400–402

Monopolistic competitionaccessibility and, 294, 314, 331agglomeration and, 286–291, 301–307, 310,

314–322, 326–336, 340–344agriculture and, 286–288, 291–293,

297–298, 301, 306–307, 309, 314–322,330, 332, 336–343

amenities and, 298black hole condition and, 302, 310break point and, 304–305, 326, 328–330,

344–345causality and, 286–287, 290, 336, 342central business district (CBD) and, 288,

323centrifugal forces and, 286centripetal forces and, 286

Chamberlinan idea of, 53–54city-region agglomeration and, 322–331commuting costs and, 288–290, 323–331,

336comparative advantage and, 298, 314–315,

334compensating losers and, 318–322consumers and, 285, 290–296, 301, 305,

316–332, 335, 344consumption and, 285, 291–292, 294, 303,

317–323, 326, 331–332, 337, 342core-periphery (CP) model and, 285,

287–290, 293n1, 295, 298, 305–307,310–311, 315–316, 318, 321–336, 343

decentralization and, 331, 342dispersion and, 286–290, 293n1, 299, 304,

305n7, 315–322, 326, 330, 333–336, 344diversity and, 335Dixit-Stiglitz model and, 108, 285–286, 389economic theory and, 14–15, 18n13, 20,

23–24elasticity of substitution and, 9, 31, 61,

75–78, 91n16, 93, 108, 161, 242, 250,253, 285, 292, 317, 388, 424, 434–435

emerging cities and, 389, 421endogeneity and, 331–332, 334equilibrium and, 285–290, 293–344exogeneity and, 298, 314–315externalities and, 285, 287–288, 306, 312firms and, 285–298, 302, 306–308, 316,

318–320, 322–336, 338, 340, 342–344formation of downtown under, 239–251growth and, 286, 295–296, 323, 428heterogeneity and, 305, 334homogeneity and, 286, 290–291, 337housing and, 288, 334imperfect competition and, 235–236,

239–251, 254, 262, 269, 279, 306increasing returns and, 108, 285–287,

290–292, 298, 306, 323, 332, 337, 342Industrial Revolution and, 343intercity trade and, 289, 306, 331intermediate goods and, 290, 336–342labor and, 285, 288, 290–292, 295–298,

307, 316, 318, 321–325, 331–333,336–338, 342–344

land rent and, 289, 323, 332–334land use and, 288–290, 322–323, 331–334linear model of, 351–354location and, 294, 298–299, 302, 306–307,

315, 318, 323, 331, 334, 336, 343






520 Subject Index

Monopolistic competition (cont.)manufacturing and, 286–287, 290–295,

299–316, 322, 324, 326, 330–342market size and, 348–357, 360, 373, 375,

382mobility and, 286–291, 301, 306, 313, 322,

334, 336, 342–343monocentric cities and, 288, 322neoclassical models and, 287oligopolistic competition and, 286optimality and, 288, 306n8, 316Pareto optimality and, 317–319, 321polycentric cities and, 336residential equilibrium and, 323returns to scale and, 286, 332, 337scale economies and, 286, 292, 316, 343shipping and, 289, 293n1, 302, 325–326,

329, 331, 334, 342, 344specialization and, 335–336, 341–343sustain point and, 302–305, 329, 344–345symmetry and, 287, 289, 298, 300,

303–307, 309–310, 313n12, 314–315,324, 326–330, 333–334, 342–343

trade-offs and, 289, 316, 324–326trade under and, 350–357transport costs and, 286–290, 293–296,

304–308, 311, 315–317, 321–326,329–335, 340–344

urban systems and, 305n7, 331variety and, 285, 291–294, 307–308,

317–323, 332–337von Thunen model and, 389wages and, 286, 291, 293–311, 316–326,

329, 331–338, 342Walras law and, 297, 320welfare and, 287–288, 297, 299, 306,

315–322, 326Monopsony power, 110, 112, 235, 239,

275Montegranaro, 349

Natural resources, 1, 10–12, 30–31, 52Nature,

first, 12, 37, 47–50, 52, 133, 343second, 12, 37, 133, 343

Neoclassical modelsgrowth, 21, 69, 75–78land use, 88n14monopolistic competition, 287trade theory and, 10–11, 21, 31, 49, 287,

342, 347

Network effect, 46, 114, 137, 188, 193–194,239, 257n9, 331, 383, 417–421, 423

New Trade theories, 347New Urban Economics, 21New York, 3, 7, 14, 90, 110, 133, 136, 239,

349, 427Nobel Prize, 10n5, 348Nogara, 349North American Free Trade Agreement

(NAFTA), 3, 23Numeraire

globalization and, 454growth and, 435imperfect competition and, 240–241, 248,

269, 272increasing returns and, 106, 111, 115, 126,

131, 142land rent and, 79market size and, 351–353, 369, 373monopolistic competition and, 293, 307,

333, 338price mechanisms and, 43public sector and, 161

Officeback, 193, 230, 462buildings, 12, 91, 202, 204front, 193, 230

Offshoringgains/losses from, 463–466intermediate input and, 466–467production and, 432, 453–460, 463–467,

469Oligopolistic competition

firm agglomeration and, 251–263imperfect competition and, 53–54, 237–238,

242, 251–263market size and, 353n6monopolistic competition and, 286preference for variety and, 251–260retailers and, 251–261shipping goods and, 262–263variety preferences and, 251–260

Optimalitycity size and, 16n10, 198–202communication and, 192, 198–201,

206–207, 210, 219–222, 232–236density and, 198–202emergence of cities and, 388, 401equidistant configuration and, 181globalization and, 462






Subject Index 521

growth and, 430, 447imperfect competition and, 235–236, 241,

248–251, 260–261, 265, 279increasing returns and, 102, 104, 123, 132,

141, 144–145land rent and, 67–68, 75, 90, 96n20, 97market size and, 12, 16n10, 151, 157, 346,

362, 380–381mixed downtown and, 248–251monopolistic competition and, 288, 305n8,

316public goods and, 151–152, 155–164,

167–168, 174–175, 178, 181social, 67, 75, 102, 132, 145, 175, 192, 198,

220, 232, 250, 261, 279, 288, 305n8, 316,362, 380, 388

Outsourcing, 469

Paris, France, 3–4, 8, 16, 90–91, 133, 178n15,239, 471

Patentscommunication and, 190growth and, 428–429, 433–440, 443, 450innovation and, 190, 428–429, 433–440,

443, 450research and development (R&D) and, 190,

428–429, 433, 435–440, 443, 450technology and, 190, 428–429, 433–440,

443, 450Pecuniary externalities, 14–15, 24, 285, 287,

306, 360, 383Perfect competition

economic theory and, 11–12, 18, 21growth and, 434increasing returns and, 106, 125, 147land rent and, 60market size and, 347, 372monopolistic competition and, 285, 287, 337price mechanisms and, 55public sector and, 164

Polycentric citiescommunication and, 221–230emergence of, 222–223equilibrium and, 221–230monopolistic competition and, 336

Population constraintcommunication and, 199, 204, 209, 215, 238land rent and, 86

Population densitycities and, 7, 62, 79n9, 83–84, 157, 170,

175, 187–188, 195–198, 201, 346n2

communication and, 187–188, 195–198,201

equilibrium and, 83, 119, 121, 159–163,195–198

land rent and, 62, 79n9, 83–84market size and, 346n2public sector and, 157, 170, 175

Population growthemergence of cities in spatial economy and,

390, 400–402, 410, 414, 416, 423urban systems and, 416–423 (see also

Urban systems)Population supply function, 116Portfolio theory, 136Poverty, 9, 125, 156Prato, 349Primacy trap, 410–411, 416Principes de geographie humaine (de la

Blache), 9–10Principle of differentiation, 236, 252, 258,

291, 458Product differentiation, 401, 419

imperfect competition and, 237, 252–253,256–261, 264

increasing returns and, 109, 140monopolistic competition and, 295,

301–304, 343public sector and, 350, 353, 356, 359, 363,

382Production

communication and, 189, 205, 208, 218n11,219, 221

core-periphery (CP) model and, 292–298,320, 322, 330–331

emergence of cities and, 392, 403–404, 406,408n4, 411, 422–424

fixed costs and, 10, 109, 112, 134, 140–145,173, 243, 264, 307, 332, 373, 428, 433,436, 467–469

globalization and, 453–458, 462–471growth and, 428, 430–435, 437–443headquarters (HQ) and, 193, 271, 290, 431,

453Henry George Theorem and, 122–123,

125, 145, 147, 154–157, 163–164, 167,177

homogeneous spatial economy and, 34–45immobility and, 52, 286, 291, 322, 349 (see

also Mobility)imperfect competition and, 239, 241, 250,

270–273






522 Subject Index

Production (cont.)increasing returns and, 99–116, 120–123,

125–128, 130, 132–134, 136–138,140–141, 147

intercity trade and, 125–136, 289, 306, 331,387

intermediate goods and, 107 (see alsoIntermediate goods)

land rent and, 60–61, 63, 66, 69–70, 74–78,88n14, 98

market size and, 346–351, 353, 358,360–361, 363, 366, 374–375, 378–379,382

monopolistic competition and, 285–292,298n2, 307, 320, 322, 330–331, 336–339,342–343

offshoring and, 432, 453–460, 463–467, 469optimal size of cities and, 12, 16n10, 151,

157plants and, 271, 431, 453–455, 468–469proximity advantages and, 14–15public sector and, 157, 161, 163–165scale economies and, 2, 8, 10, 12–13, 16,

99–105, 114–127, 130–132, 152, 286,292, 316, 343, 347, 359, 399, 403, 424,453

spatial impossibility theorem and, 32,34–47, 52, 54, 59–61, 73, 100–101, 125,147, 236

variety and, 235–242, 251–270, 278 (seealso Variety)

Progress and Poverty (George), 125, 156Protectionism, 1, 470Proximity

communication and, 187, 190, 193, 202,220

competition and, 347–348, 350, 365,374–375

economic theory and, 1, 4, 10, 12, 14globalization and, 467human interaction and, 14–15imperfect competition and, 251, 255, 262,

277increasing returns and, 104, 148land as free good and, 60land rent and, 60, 81market size and, 347–348, 350, 365,

374–375price mechanism breakdown and, 50production advantages and, 14–15public sector and, 153, 175

von Thunen model and, 60Public goods

centralized provision of, 158–161collective ownership and, 157–158congestible, 153, 164distance-decay effect and, 90Henry George Theorem and, 122–123, 125,

145, 147, 154–157, 163–164, 167, 177impure, 150increasing returns and, 100, 104, 106n5,

122n13, 133land developers and, 161–163local, 24, 89–90, 93, 100, 104, 106n5,

122n13, 133, 149–154, 158–169,177–178, 437–438

nonexcludable, 150nonrivalrous, 150, 189optimality and, 151–152, 155–164,

167–168, 174–175, 178, 181public sector and, 149–152, 161–163,

166–168, 177–178pure, 150–151, 153, 156, 158, 167, 169, 438transport costs and, 151traveled-for goods and, 152n3

Public sectoragglomeration and, 149, 163amenities and, 157bid rent function and, 165, 175budget constraints and, 153–156, 159, 169,

176community and, 150–151, 154, 157, 166,

169–174commuting costs and, 151–152, 155competition and, 150–154, 157–158, 161,

164–168, 175–178Condorcet equilibrium and, 170–172decentralization and, 154, 164, 167, 179democratized cities and, 149density and, 153, 157, 169–170, 175developers and, 151–152, 154, 161–164,

166, 168, 178diversity and, 179endogeneity and, 151, 161, 168equity and, 175exogeneity and, 161, 164first-best analysis and, 152, 157growth and, 157, 166Henry George Theorem and, 154–157,

163–164, 167, 177homogeneity and, 149, 152, 179housing and, 178






Subject Index 523

increasing returns and, 149information and, 177innovation and, 179jurisdictional issues and, 150–151, 164,

168–177, 179land capitalization and, 150, 161, 164–168,

175–178land use and, 150–170, 175–178local government and, 158, 166–168, 178location and, 150–154, 157, 161, 164–171,

175–179, 182–184markets and, 150, 154, 157–158, 161,

163–165, 169, 172–179mobility and, 150–151, 166perfect competition and, 164proximity and, 153, 175public goods and, 161–163, 166–168,

177–178residential equilibrium and, 153–154,

160–162, 175resources and, 154–155, 177returns to scale and, 153scale economies and, 152sharing and, 167spatial competition and, 151, 177spillovers and, 166taxes and, 150–159, 164, 167–177trade-offs and, 155, 164, 166, 168, 175transport costs and, 151, 169, 171–176urban systems and, 159n8, 163, 166voting equilibrium and, 152, 177walled cities and, 149welfare and, 153, 156n5, 161, 173–174zero-profit condition and, 164

Putty-clay economic geography, 37, 306, 378,423

Quadratic assignment problemland rent and, 60, 73–74price mechanisms and, 32–34, 39, 47, 51n8,

55–58von Thunen model and, 60, 73–74

Quality heterogeneity, 367–368Quasi-rent, 176–177

Rawlsian approach, 85, 124, 141–142, 174,321–322, 430

Receivers, 188, 232Regional economics, 11, 55, 209, 286,

336Regional science, 13, 23

Republic of Korea, 3Research and development (R&D)

globalization and, 454, 470growth and, 427–429, 432–433, 435,

437–442, 449–452patents and, 190, 428–429, 433, 435–440,

443, 450Residential equilibrium

communication and, 198comparative statics of, 84–85efficiency of, 85–86imperfect competition and, 272–273increasing returns and, 116–117, 143land rent and, 62, 78–87, 95–97monocentric cities and, 78–83monopolistic competition and, 323polycentric cities and,public sector and, 153–154, 160–162,

175von Thunen model and, 62

Retailersclustering of, 263–269imperfect competition and, 235, 237–238,

248, 251–269increasing returns and, 100oligopolistic competition and, 251–261symmetric distribution of, 248

Ricardian comparative advantageincreasing returns and, 100, 135market size and, 359

Royal Swedish Academy of Sciences, 348

Sassuolo, 349Scale economies

economic theory and, 2, 8, 10, 12–13, 16globalization and, 453increasing returns and, 99–105, 114–127,

130–132market size and, 347, 359monopolistic competition and, 286, 292,

316, 343production and, 2, 8, 10, 12–13, 16, 99–105,

114–127, 130–132, 152, 286, 292, 316,343, 347, 359, 399, 403, 424, 453

public sector and, 152Search

bilateral, 105n4consumers and, 238, 263–269, 278, 281monopolistic competition and, 310spatial equity and, 141

Secondary employment centers, 271–278






524 Subject Index

Segregationcommunication and, 228land rent and, 66, 70–75, 87, 89

Self-organizing cities, 194–198Self-sufficiency, 11, 218, 411Serbia, 3Service sector, 135, 290Shanghai, 427Sharing

defined, 100increasing returns and, 100–102, 105–110intermediate sector and, 106–110public sector and, 167

Shippingemergence of cities and, 390, 399, 409globalization and, 453, 467, 469imperfect competition and, 237–238,

262–263increasing returns and, 127, 134land rent and, 63n6, 71, 74–75market size and, 347–348, 353, 356, 361,

368, 372–374, 382monopolistic competition and, 289, 293n1,

302, 325–326, 329, 331, 334, 342, 344Shopping, 4

emergence of cities and, 388imperfect competition and, 235, 237–239,

250, 258, 262–263, 265, 268–269increasing returns and, 143multipurpose, 388

Shopping centers, 263–269Shopping models, 236–238, 262–263Short-run equilibrium, 294–297, 299, 307,

354, 364Silicon Valley, 4, 189Social contacts, 15, 198n3Social surplus, 66, 68, 150, 360–361Spatial competition, 388

imperfect competition and, 236–239,251–263, 279

increasing returns and, 99, 103–106, 111,137, 140–143, 146–147

intercity trade and, 125–137market size and, 347, 356, 360preference for variety and, 251–263price mechanisms and, 30, 46, 53public sector and, 151, 177

Spatial economicsbell-shaped curve and, 331–336central business district (CBD) and, 78 (see

also Central business district (CBD))


clusters and, 2, 4, 9, 13–14, 24 (see alsoClusters)

coagglomeration of intermediate/finalsectors and, 402–416

communication and, 193–204competition and, 18–22 (see also

Competition)core-periphery (CP) model and, 285–336,

291 (see also Core-periphery (CP) model)cross-relocation and, 39homogeneity and, 30–32, 34, 36–37, 39, 41,

45–55 (see also Homogeneity)international trade theory and, 10, 20, 125land rent and, 59–98location theory and, 1, 4–13, 16n11, 19–24,

104, 137, 251, 348, 353, 374 (see alsoLocation)

nation unit and, 22–23new economic geography and, 22–24optimum firm distribution and, 140–142price mechanism breakdown and, 29–58proximity and, 1, 4, 10, 12, 14, 50 (see also

Proximity)regional economics and, 11, 55, 209, 286,

336residential equilibrium and, 62, 78–87,

95–97, 116–117, 143, 153–154, 160–162,175, 198, 272–273, 323

scale and, 2, 4, 6, 24, 54, 147, 279, 336, 383,466, 471

space/economics relationship and, 17–24spatial impossibility theorem and, 32,

34–47, 52, 54, 59–61, 73, 100–101, 125,147, 236

von Thunen model and, 59–77zones and, 2, 66, 77, 88, 92, 266

Spatial impossibility theoremcompetitive equilibrium and, 34–47cross-relocation and, 39imperfect competition and, 236increasing returns and, 100–101, 125,

147land rent and, 45–46, 59–61, 73price mechanisms and, 32, 34–47, 52, 54statement of, 39

Spatial interaction theory, 15, 210, 256Spatially discounted accessibility, 210–211,

221–223, 237, 243Spatial price discrimination, 354






Subject Index 525

Spatial scale, 2, 4, 6, 24, 54, 147, 279, 336,383, 466, 471

Specializationcommunication and, 218–219economic theory and, 3–4, 7–8, 13–14emergence of cities and, 402, 411–416,

423–424globalization and, 454, 459, 470growth and, 427–428imperfect competition and, 244, 272increasing returns and, 100, 105–110,

125–136intercity trade and, 125–136land rent and, 65–66, 69, 74, 77–78market size and, 348–349, 359monopolistic competition and, 335–336,

341–343partial, 135regional, 134

Spilloversaggregate accessibility and, 208, 211, 215,

237communication and, 189, 191, 192n2, 208,

221, 232consumers and, 433–437distance-decay effect and, 382firms and, 433–437globalization and, 426growth and, 426, 429, 433–442, 449, 452increasing returns and, 101, 114–115knowledge, 114, 381, 426, 433–442, 449localized, 221market size and, 381–383migration behavior and, 441–442public sector and, 166technology and, 14, 17, 101, 114–115, 166,

189, 191, 192n2, 208, 221, 232, 381–383,426, 429, 433–442, 449, 452

“Stability in Competition” (Hotelling), 22Standard optimization, 235, 254Static models, 34, 263n11, 426Stratification, 62Subgame perfect Condorcet equilibrium,

170–172Suburbanization, 62, 83–84, 239Sustainability

communication and, 217emergence of cities and, 389, 395, 408, 410growth and, 449increasing returns and, 114n9land rent and, 81

monocentric economy and, 389, 395–400price mechanisms and, 33spatial impossibility theorem and, 32,

34–47, 52, 54, 59–61, 73, 100–101, 125,147, 236

Sustain point, 302–305, 329, 344–345, 449Symmetry

communication and, 193, 196, 198, 200,207, 211, 214,

consumer distribution and, 154, 193, 196,198

duocentric configuration and, 236emergence of cities and, 392, 403, 416, 419,

422firms and, 206–207, 354–355globalization and, 454global production patterns and, 23growth and, 439, 448–452imperfect competition and, 240–241,

243–244, 248, 258, 260, 268, 275, 277increasing returns and, 108, 111n7information and, 206market size and, 350, 354–355, 360,

364–366, 374–382monopolistic competition and, 287, 289,

298, 300, 303–307, 309–310, 312n12,314–315, 324, 326–330, 333–334,342–343

price mechanisms and, 23, 43, 50–51public sector and, 154, 180transport costs and, 200urban systems and, 416, 419, 422

Tariffs, 6, 237, 468Taxes

increasing returns and, 115, 122, 133n18,145

public sector and, 150–159, 164, 167–177tariffs and, 6, 237, 468

Technologyagriculture and, 5, 7communication and, 2, 188–192, 201,

204–205convexity and, 21, 29, 31emergence of cities and, 391, 400, 403externalities and, 15 (see also Externalities)globalization and, 453, 463, 471growth and, 426–432, 437imperfect competition and, 237, 240, 254increasing returns and, 104, 106–107, 110,

127, 129, 136, 140






526 Subject Index

Technology (cont.)innovation and, 5 (see also Innovation)land rent and, 60, 63, 65, 69–78, 84, 95, 98location of activities and, 69–75market size and, 349, 354, 363, 366, 375,

381, 383monopolistic competition and, 288,

291–293, 306n8, 314, 323, 337neoclassical, 69, 75–78patents and, 190, 428–429, 433–440, 443,

450public sector and, 178–179spillovers and, 14, 17, 101, 114–115, 166,

189, 191, 192n2, 208, 221, 232, 381–383,426, 429, 433–442, 449, 452

von Thunen model and, 60, 63, 65, 69–78Theory of Economic History, A (Hicks), 354Third Italy, 349Three Essays on the State of Economic Science

(Koopmans), 18–19Time costs, 5Tokyo, 3–4, 8, 85n13, 133, 136, 239Trade costs, 6, 287, 307, 314, 335, 401, 461,

468Trade-offs

communication and, 188, 198n3, 324–326equity and, 451globalization and, 467–468growth and, 451imperfect competition and, 239, 252, 264increasing returns and, 99–148 (see also

Increasing returns)land rent and, 59, 78–79, 89, 96market size and, 347, 374, 381monopolistic competition and, 289, 316,

324–326price mechanism breakdown and, 54public sector and, 155, 164, 166, 168, 175transport costs and, 101, 105, 126, 132–134,

137, 140–142, 145, 151, 324–326von Thunen model and, 59

Transaction costs, 5–6, 49, 115, 459Transmitters, 188, 232Transport costs

agriculture and, 372–373Arrow-Debreu model and, 30black hole condition and, 302, 310, 398,

401–402, 409, 414, 416, 419, 424city formation under preference and,

392–393, 395, 397, 400clustering of retailers and, 263–269

coagglomeration of intermediate and finalsectors and, 402–403, 408–409, 412, 414,416

communication and, 200commuting costs and, 9 (see also

Commuting costs)core-periphery (CP) model and, 285–290,

293–298, 304–311, 315–318, 321–326,329–336, 343, 390

cross-commuting and, 210–212, 215delivered price and, 262, 308, 356, 404, 422delivery cost and, 12, 289, 430–431, 453differentiated goods and, 391duocentric configuration and, 192, 219n13,

222–230, 236–237economic theory and, 1–2, 5–10, 12–13,

18–19, 22–23emergence of cities and, 390–397, 400,

402–403, 408–409, 412, 414, 416, 419,421–424

firm concentration and, 359four T’s of, 5–6freight absorption and, 356globalization and, 458–470growth and, 429–433, 449–453home-market effect (HME) and, 359, 366,

372–374homogeneous spatial economy and, 34–45iceberg form of, 40–43, 63n6, 286, 289,

293–294, 323, 338, 343–344, 354, 403,422, 453

imperfect competition and, 237, 251–252,258, 261, 263, 265–267, 271, 278, 281

importance of, 5–6increasing returns and, 10–11, 101, 105,

126, 132–134, 137, 140–142, 145Industrial Revolution and, 2–3, 5integrated districts and, 213, 215, 221, 244,

246–248, 271land rent and, 59–60, 63, 65–66, 68, 70,

73–74, 78location and, 32 (see also Location)market size and, 346–350, 354, 359, 366,

372–374, 380–382monopolistic competition and, 286–290,

293–296, 304–308, 311, 315–317,321–326, 329–335, 340–344

optimal size of cities and, 12, 16n10, 151,157

price mechanism breakdown and, 30–34,38–41, 45, 47, 51–57






Subject Index 527

principle of minimum differentiation and,236, 252, 258

proximity and, 60 (see also Proximity)public sector and, 151, 169, 171–176reduction of, 462–463shipping and, 5–6, 13n7 (see also Shipping)spatial impossibility theorem and, 32,

34–47, 52, 54, 59–61, 73, 100–101, 125,147, 236

tariffs and, 6, 237, 468trade-offs and, 59, 101, 105, 126, 132–134,

137, 140–142, 145, 151, 324–326transaction costs and, 5–6, 49, 115, 459traveled-for goods and, 152n3von Thunen model and, 16, 59–77, 388n1,

389zero, 5, 12, 132, 134, 293n1, 392n2, 458

Traveled-for goods, 152n3Two ice-cream men problem, 236–237

United Nations Population Fund, 7Urban centers

communication and, 198hierarchical system of, 387imperfect competition and, 235 (see also

Imperfect competition)reverse migration from, 400

Urbanizationcommunication and, 191cross-commuting and, 210–212, 215decentralization of, 230–227economic theory and, 6–8economies, 124emergence of cities and, 390, 423–424growth and, 6–7 (see also Growth)imperfect competition and, 239increasing returns and, 124land rent and, 62, 83–84monopolistic competition and, 305n7public sector and, 166von Thunen model and, 20–21 (see also Von

Thunen model)Urban systems

adjustment process and, 417–418core-periphery (CP) model and, 421emergence of cities and, 387–391, 416–424increasing returns and, 103, 105, 125, 127,

129, 132–134monopolistic competition and, 331as networks of cities, 418–421number/size of cities and, 421–423

public sector and, 159n8, 163resilience of, 423structure of, 416–423symmetry and, 416, 419, 422

Utilitarian welfare function, 321–322

Value and Capital (Hicks), 18Variety

core-periphery (CP) model and, 285,291–294, 307–308, 317–323, 332–336

emergence of cities and, 389–403, 410–411,422–423

freight absorption and, 356globalization and, 453, 456growth and, 428, 433–436, 439–440, 442imperfect competition and, 235–242,

251–270, 278increasing returns and, 100, 106–107market size and, 351–355, 367–368monopolistic competition and, 285,

291–294, 307–308, 317–323, 332–337oligopolistic competition and, 251–260vertical linkages and, 342, 390, 409

von Thunen model, 388n1accessibility and, 60, 75, 78agriculture and, 59–60, 63–64, 66, 69bid rent function and, 21, 61, 64–73, 76,

79–82, 86–87, 90–98, 116, 165, 175, 194,206, 208–213

centrifugal forces and, 16Cobb-Douglas function and, 75commuting costs and, 62competition and, 59–61, 63–64, 67–68, 71,

75divisible activities and, 62–78equations of, 63–64, 68, 70–71, 73, 76isolated state and, 97n22Krugman and, 16–17land rent and, 59–79, 82–83, 87, 97n22,

98location and, 59–66, 68–70, 74, 76–77manufacturing and, 388n1, 389markets and, 59–71, 74monopolistic competition and, 389proximity and, 60quadratic assignment problem and, 60,

73–74raw materials and, 16residential equilibrium and, 62steepest cost gradient and, 66technology and, 75–78






528 Subject Index

von Thunen model (cont.)trade-offs and, 59transport costs and, 16, 60, 63, 65, 69–77,

388n1, 389urban economics and, 20–21variations of, 389

Wage function, 117, 119, 128, 209, 236–237,409

Wagescity size and, 130communication and, 191, 205–212, 215n9,

216, 221, 236–237economic theory and, 11, 16emergence of cities and, 391–397, 401, 403,

405–411, 414, 417–418equilibrium, 110, 112–113, 119, 127–128,

130, 215n9, 216, 274–275, 296, 303,319–320, 370, 445, 454, 465

gap in, 291, 342, 460, 462globalization and, 454–457, 460–465,

469–471growth and, 430–432, 435, 440–441,

444–448higher, 99, 105, 110, 112–113, 118, 128,

130, 132, 134, 205, 221, 272, 309, 370,372

imperfect competition and, 239, 272–278increasing returns and, 99–102, 105–113,

116–119, 122–126land rent and, 64n7, 69, 76–77lower, 272, 275, 371, 414, 462market size and, 349, 351, 368–374,


293–311, 316–326, 329, 331–338,342

real, 69, 132, 297–304, 311, 316–317, 324,329, 342, 393–395, 400–403, 407, 410,414, 417–418, 432, 464

rural, 239

Walras law, 297, 320Welfare

communication and, 188, 202, 232–233core-periphery (CP) model and, 287–288,

315–322efficiency of firm agglomeration and,

260–262emergence of cities and, 400–402, 409–411,

414–416gap in, 451–453globalization and, 463, 465growth and, 426, 430, 442, 452–453imperfect competition and, 250, 260increasing returns and, 115, 124, 129integrated cities and, 410–411land rent and, 75, 85, 97local public goods and, 24, 89–90, 93, 100,

104, 106n5, 122n13, 133, 149–154,158–169, 177–178, 437–438

market size and, 360–361, 379–380monocentric economy and, 400–402monopolistic competition and, 287–288,

297, 299, 306, 315–322, 326public sector and, 153, 156n5, 161, 173–174specialized cities and, 414–416

Wholesalers, 6Workers. See Labor

Zero-profit conditionequilibrium and, 64, 98, 101–102, 113, 123,

128, 164, 286, 293, 297–298, 332, 338,373, 395–397, 404–405, 440, 457, 465

globalization and, 457, 465growth and, 440increasing returns and, 101–102, 113, 123,

128land rent and, 64, 98market size and, 373monopolistic competition and, 286, 293,

297–298, 332, 338public sector and, 164






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Author Index - Cambridge University Pressassets.cambridge.org/97811070/01411/index/9781107001411...Masahisa Fujita and Jacques-françois Thisse Index More information Subject Index