Externalités spatiales, économies d'agglomération et formation endogène d'une ville monocentrique

We study the endogenous formation of a monocentric city where the location of both firms and workers are endogenous. In our model, the main force of agglomeration consists of positive spatial externalities between firms (such as, for example, face to face communications) while the main force of dispersion is the land price and the labor cost. In this context, we show that there exists a unique urban equilibrium where firms locate around the middle of the city (thus forming the Central Business Distric or CBD), employed workers live at the vicinity of the CBD and the unemployed reside at the periphery of the city. We, then, perfom different comparative statics analyses. We show, in particular, that land prices are non-monotonic within the CBD whereas they always decrease outside of it. We also show that when firms increase their land consumption, it rises the equilibrium land price outside the CBD but has an ambiguous effect inside the CBD. Consequently, this paper puts forward the importance of modelling firms' location and of not considering the CBD as exogenous in a context where individuals are differentiated by both their employment status and their location in the city.