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Agglomération et marché

Author

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  • Masahisa Fujita
  • Jacques-François Thisse

Abstract

The most salient feature of the spatial economy is the presence of a large variety of economic agglomerations. The purpose of this paper is to review some of the main explanations of this universal phenomenon, as they are proposed in urban economics and modern economic geography. Because of space constraints, we focus on the most recent contributions. Since models of comparative advantage have been extensively studied by international and urban economists, while models of spatial competition have attracted a lot of attention in industrial organization, we restrict ourselves to multiregional models of industrial agglomeration based on monopolistic competition. The paper is organized as follows. In the first part, we show why the competitive framework can hardly be the foundation for the economics of agglomeration. We then briefly review the alternative modeling strategies. In the hope to make our paper accessible to a broad audience, the second part presents in detail the two (specific) models that have been used so far to study the spatial distribution of economic activities. This leads us to put aside non-market institutions and mechanisms that stand at the source of various agglomeration externalities. Several extensions of these models are then discussed. This includes the comparison of market and optimum outcomes, the impact of forward-looking migrations and of urban costs, as well as the role of a heterogeneous labor force and of intermediate commodities. We conclude with some suggestions for further research together with some policy implications.

Suggested Citation

  • Masahisa Fujita & Jacques-François Thisse, 2001. "Agglomération et marché," Cahiers d'Economie et Sociologie Rurales, INRA Department of Economics, vol. 58, pages 11-57.
    • Handle: RePEc:rae:jouces:v:58-59:y:2001:p:11-57
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