IDEAS home Printed from https://ideas.repec.org/p/hal/wpaper/hal-03550799.html
   My bibliography  Save this paper

Is agglomeration desirable?

Author

Listed:
  • Fabien Candau

    (CATT - Centre d'Analyse Théorique et de Traitement des données économiques - UPPA - Université de Pau et des Pays de l'Adour)

Abstract

By introducing heterogeneity between high-skilled mobile and low-skill immobile workers in a model with land rent and commuting costs we develop a new model in the field of the new economic geography. This model, which can reveal a dispersion-agglomeration-dispersion configuration when trade gets freer, is used to compare via the Pareto criterion the two possible market outcomes, i.e. agglomeration and dispersion. When these equilibria can be ranked it is shown that dispersion can be a Pareto-efficient outcome.

Suggested Citation

  • Fabien Candau, 2009. "Is agglomeration desirable?," Working Papers hal-03550799, HAL.
    • Handle: RePEc:hal:wpaper:hal-03550799
    Note: View the original document on HAL open archive server: https://univ-pau.hal.science/hal-03550799
    as

    Download full text from publisher

    File URL: https://univ-pau.hal.science/hal-03550799/document
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Olga Alonso‐Villar, 2008. "A model of economic geography with demand‐pull and congestion costs," Papers in Regional Science, Wiley Blackwell, vol. 87(2), pages 261-276, June.
    2. Krugman, Paul & Elizondo, Raul Livas, 1996. "Trade policy and the Third World metropolis," Journal of Development Economics, Elsevier, vol. 49(1), pages 137-150, April.
    3. Fujita, Masahisa & Thisse, Jacques-François, 2009. "New Economic Geography: An appraisal on the occasion of Paul Krugman's 2008 Nobel Prize in Economic Sciences," Regional Science and Urban Economics, Elsevier, vol. 39(2), pages 109-119, March.
    4. Combes, Pierre-Philippe & Lafourcade, Miren & Thisse, Jacques-François & Toutain, Jean-Claude, 2011. "The rise and fall of spatial inequalities in France: A long-run perspective," Explorations in Economic History, Elsevier, vol. 48(2), pages 243-271, April.
    5. Rikard Forslid & Gianmarco I.P. Ottaviano, 2003. "An analytically solvable core-periphery model," Journal of Economic Geography, Oxford University Press, vol. 3(3), pages 229-240, July.
    6. Paul Krugman & Anthony J. Venables, 1995. "Globalization and the Inequality of Nations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(4), pages 857-880.
    7. Head, Keith & Mayer, Thierry, 2004. "The empirics of agglomeration and trade," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 59, pages 2609-2669, Elsevier.
    8. Murata, Yasusada & Thisse, Jacques-Francois, 2005. "A simple model of economic geography a la Helpman-Tabuchi," Journal of Urban Economics, Elsevier, vol. 58(1), pages 137-155, July.
    9. repec:hal:wpspec:info:hdl:2441/10191 is not listed on IDEAS
    10. Charlot, Sylvie & Gaigne, Carl & Robert-Nicoud, Frederic & Thisse, Jacques-Francois, 2006. "Agglomeration and welfare: The core-periphery model in the light of Bentham, Kaldor, and Rawls," Journal of Public Economics, Elsevier, vol. 90(1-2), pages 325-347, January.
    11. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    12. Timothy J. Hatton & Jeffrey G. Williamson, 2008. "Global Migration and the World Economy: Two Centuries of Policy and Performance," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262582775, April.
    13. Steven Brakman & Harry Garretsen, 2009. "Trade and Geography: Paul Krugman and the 2008 Nobel Prize for Economics," Spatial Economic Analysis, Taylor & Francis Journals, vol. 4(1), pages 5-23.
    14. J.Peter Neary, 2001. "Of Hype and Hyperbolas: Introducing the New Economic Geography," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 536-561, June.
    15. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    16. Murata, Yasusada, 2003. "Product diversity, taste heterogeneity, and geographic distribution of economic activities:: market vs. non-market interactions," Journal of Urban Economics, Elsevier, vol. 53(1), pages 126-144, January.
    17. repec:hal:spmain:info:hdl:2441/10191 is not listed on IDEAS
    18. Kim, Sukkoo, 1998. "Economic Integration and Convergence: U.S. Regions, 1840–1987," The Journal of Economic History, Cambridge University Press, vol. 58(3), pages 659-683, September.
    19. Pflüger, Michael & Südekum, Jens, 2008. "Integration, agglomeration and welfare," Journal of Urban Economics, Elsevier, vol. 63(2), pages 544-566, March.
    20. Fabien Candau, 2008. "Entrepreneurs' Location Choice And Public Policies: A Survey Of The New Economic Geography," Journal of Economic Surveys, Wiley Blackwell, vol. 22(5), pages 909-952, December.
    21. Fabien Candau, 2008. "Urban costs, Trade costs and Tax Competition," Revue d'économie politique, Dalloz, vol. 118(5), pages 625-661.
    22. Steven Brakman & Harry Garretsen, 2009. "Trade and Geography: Paul Krugman and the 2008 Nobel Prize in Economics," CESifo Working Paper Series 2528, CESifo.
    23. repec:hhs:iuiwop:430 is not listed on IDEAS
    24. Thisse, Jacques-François & Fujita, Masahisa, 2008. "New Economic Geography: an appraisal on the occasion of Paul Krugman's 2008 Nobel Prize in Economics," CEPR Discussion Papers 7063, C.E.P.R. Discussion Papers.
    25. Gianmarco I.P. Ottaviano & Frédéric Robert-Nicoud, 2006. "The 'genome' of NEG models with vertical linkages: a positive and normative synthesis," Journal of Economic Geography, Oxford University Press, vol. 6(2), pages 113-139, April.
    26. Fujita, Masahisa & Mori, Tomoya & Henderson, J. Vernon & Kanemoto, Yoshitsugu, 2004. "Spatial distribution of economic activities in Japan and China," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 65, pages 2911-2977, Elsevier.
    27. Tabuchi, Takatoshi, 1998. "Urban Agglomeration and Dispersion: A Synthesis of Alonso and Krugman," Journal of Urban Economics, Elsevier, vol. 44(3), pages 333-351, November.
    28. Kristian Behrens & Frédéric Robert‐Nicoud, 2009. "Krugman's Papers in Regional Science: The 100 dollar bill on the sidewalk is gone and the 2008 Nobel Prize well‐deserved," Papers in Regional Science, Wiley Blackwell, vol. 88(2), pages 467-489, June.
    29. Anonymous, 2009. "Abstract of the discussion," British Actuarial Journal, Cambridge University Press, vol. 15(1), pages 202-217, March.
    30. Frédéric Robert-Nicoud, 2005. "The structure of simple 'New Economic Geography' models (or, On identical twins)," Journal of Economic Geography, Oxford University Press, vol. 5(2), pages 201-234, April.
    31. Fabien Candau, 2008. "Entrepreneurs' Location Choice And Public Policies: A Survey Of The New Economic Geography," Journal of Economic Surveys, Wiley Blackwell, vol. 22(5), pages 909-952, December.
    32. Michael Pflüger & Jens Südekum, 2008. "A synthesis of footloose-entrepreneur new economic geography models: when is agglomeration smooth and easily reversible?," Journal of Economic Geography, Oxford University Press, vol. 8(1), pages 39-54, January.
    33. Frédéric Robert-Nicoud, 2006. "Agglomeration and Trade with Input–Output Linkages and Capital Mobility," Spatial Economic Analysis, Taylor & Francis Journals, vol. 1(1), pages 101-126.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Candau, Fabien & Gbandi, Tchapo, 2019. "Trade and institutions: explaining urban giants," Journal of Institutional Economics, Cambridge University Press, vol. 15(6), pages 1017-1035, December.
    2. Fabien Candau, 2013. "Trade, FDI and Migration," International Economic Journal, Taylor & Francis Journals, vol. 27(3), pages 441-461, September.
    3. Fabien Candau & Elisa Dienesch, 2015. "Spatial distribution of skills and regional trade integration," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 54(2), pages 451-488, March.
    4. Fabien Candau & Marc Fleurbaey, 2011. "Agglomeration and Welfare with Heterogeneous Preferences," Open Economies Review, Springer, vol. 22(4), pages 685-708, September.
    5. Fabien Candau & Elisa Dienesch, 2015. "Spatial distribution of skills and regional trade integration," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 54(2), pages 451-488, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fabien Candau & Michaël Goujon & Jean-François Hoarau & Serge Rey, 2014. "Real exchange rate and competitiveness of an EU's ultra-peripheral region: La Reunion Island," International Economics, CEPII research center, issue 137, pages 1-21.
    2. Fabien Candau, 2011. "Is Agglomeration Desirable?," Annals of Economics and Statistics, GENES, issue 101-102, pages 203-227.
    3. Kristian Behrens & Frédéric Robert‐Nicoud, 2009. "Krugman's Papers in Regional Science: The 100 dollar bill on the sidewalk is gone and the 2008 Nobel Prize well‐deserved," Papers in Regional Science, Wiley Blackwell, vol. 88(2), pages 467-489, June.
    4. Fabien Candau, 2008. "Entrepreneurs' Location Choice And Public Policies: A Survey Of The New Economic Geography," Journal of Economic Surveys, Wiley Blackwell, vol. 22(5), pages 909-952, December.
    5. José M. Gaspar, 2018. "A prospective review on New Economic Geography," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 61(2), pages 237-272, September.
    6. Schaeffer, Y. & Charlot, S., 2012. "Inequality aversion, income redistribution and economic geography," Working Papers 201204, Grenoble Applied Economics Laboratory (GAEL).
    7. Maria Florencia Granato, 2011. "REGIONAL NEW ECONOMIC GEOGRAPHY (refereed paper)," ERSA conference papers ersa10p747, European Regional Science Association.
    8. Fabien Candau & Marc Fleurbaey, 2011. "Agglomeration and Welfare with Heterogeneous Preferences," Open Economies Review, Springer, vol. 22(4), pages 685-708, September.
    9. Fabien Candau, 2013. "Trade, FDI and Migration," International Economic Journal, Taylor & Francis Journals, vol. 27(3), pages 441-461, September.
    10. Ottaviano, Gianmarco & Thisse, Jacques-Francois, 2004. "Agglomeration and economic geography," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 58, pages 2563-2608, Elsevier.
    11. Olga Alonso-Villar, 2006. "A Reflection On The Effects Of Transport Costs Within The New Economic Geography," Working Papers 57, ECINEQ, Society for the Study of Economic Inequality.
    12. Pflüger, Michael P. & Tabuchi, Takatoshi, 2008. "Trade and Location with Land as a Productive Factor," IZA Discussion Papers 3716, Institute of Labor Economics (IZA).
    13. Pflüger, Michael & Tabuchi, Takatoshi, 2010. "The size of regions with land use for production," Regional Science and Urban Economics, Elsevier, vol. 40(6), pages 481-489, November.
    14. Fabien Candau, 2008. "Urban costs, Trade costs and Tax Competition," Revue d'économie politique, Dalloz, vol. 118(5), pages 625-661.
    15. Stef Proost & Jacques-François Thisse, 2019. "What Can Be Learned from Spatial Economics?," Journal of Economic Literature, American Economic Association, vol. 57(3), pages 575-643, September.
    16. Akamatsu, Takashi & Mori, Tomoya & Osawa, Minoru & Takayama, Yuki, 2017. "Spatial scale of agglomeration and dispersion: Theoretical foundations and empirical implications," MPRA Paper 80689, University Library of Munich, Germany.
    17. José M. Gaspar, 2020. "Paul Krugman: contributions to Geography and Trade," Letters in Spatial and Resource Sciences, Springer, vol. 13(1), pages 99-115, April.
    18. Olga Alonso‐Villar, 2008. "A model of economic geography with demand‐pull and congestion costs," Papers in Regional Science, Wiley Blackwell, vol. 87(2), pages 261-276, June.
    19. Akamatsu, Takashi & Takayama, Yuki & Ikeda, Kiyohiro, 2012. "Spatial discounting, Fourier, and racetrack economy: A recipe for the analysis of spatial agglomeration models," Journal of Economic Dynamics and Control, Elsevier, vol. 36(11), pages 1729-1759.
    20. Okubo, Toshihiro, 2009. "Trade liberalisation and agglomeration with firm heterogeneity: Forward and backward linkages," Regional Science and Urban Economics, Elsevier, vol. 39(5), pages 530-541, September.

    More about this item

    Keywords

    Economic geography; Cities; Trade; Welfare;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:wpaper:hal-03550799. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.