IDEAS home Printed from https://ideas.repec.org/p/wiw/wiwrsa/ersa14p985.html
   My bibliography  Save this paper

Birth of Cities: Division of Labor and Transportation Costs

Author

Listed:
  • tadashi morita
  • kazuhiro yamamoto

Abstract

In this paper, we constructs a model with two-region, two sector and two types of workers. One type of workers has a comparative advantage in agricultural production and mobile between two regions, while the other type of workers has a comparative advantage in producing manufactured goods and immobile between regions. We assume that intra-regional (inter-regional) trade incurs transaction (transportation) costs. This paper shows that when the productivity of workers is low relative to the intra-regional transaction costs, division of labor is not performed and the market does not exist. In this economy, both workers are self-sufficient. When the productivity of workers becomes medium level, division of labor is progressed in a region where both types of workers exist, and the market is formed. The number of people living in this region increases and this region becomes the city. When the productivity of workers becomes high, inter-regional trade starts and the division of labor is also progressed in the other region.

Suggested Citation

  • tadashi morita & kazuhiro yamamoto, 2014. "Birth of Cities: Division of Labor and Transportation Costs," ERSA conference papers ersa14p985, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa14p985
    as

    Download full text from publisher

    File URL: https://www-sre.wu.ac.at/ersa/ersaconfs/ersa14/e140826aFinal00985.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Donald R. Davis & Jonathan I. Dingel, 2019. "A Spatial Knowledge Economy," American Economic Review, American Economic Association, vol. 109(1), pages 153-170, January.
    2. Kristian Behrens & Gilles Duranton & Frédéric Robert-Nicoud, 2014. "Productive Cities: Sorting, Selection, and Agglomeration," Journal of Political Economy, University of Chicago Press, vol. 122(3), pages 507-553.
    3. Starrett, David, 1978. "Market allocations of location choice in a model with free mobility," Journal of Economic Theory, Elsevier, vol. 17(1), pages 21-37, February.
    4. Fujita,Masahisa & Thisse,Jacques-François, 2013. "Economics of Agglomeration," Cambridge Books, Cambridge University Press, number 9781107001411, September.
    5. Pines,David & Sadka,Efraim & Zilcha,Itzhak (ed.), 1998. "Topics in Public Economics," Cambridge Books, Cambridge University Press, number 9780521561365, October.
    6. Kanemoto, Yoshitsugu, 1980. "Theories of urban externalities," MPRA Paper 24614, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    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. 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.
    2. de Palma, André & Papageorgiou, Yorgos Y. & Thisse, Jacques-François & Ushchev, Philip, 2019. "About the origin of cities," Journal of Urban Economics, Elsevier, vol. 111(C), pages 1-13.
    3. 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.
    4. Breinlich, Holger & Ottaviano, Gianmarco I.P. & Temple, Jonathan R.W., 2014. "Regional Growth and Regional Decline," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 4, pages 683-779, Elsevier.
    5. repec:esx:essedp:729 is not listed on IDEAS
    6. Behrens, Kristian & Robert-Nicoud, Frédéric, 2015. "Agglomeration Theory with Heterogeneous Agents," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 171-245, Elsevier.
    7. Carl Gaigné & Jacques-François Thisse, 2013. "New Economic Geography and the City," Working Papers SMART 13-02, INRAE UMR SMART.
    8. Xu, Xilei & Dong, Xuebing & Chi, Ruonan & Li, Jixia, 2022. "How does heterogeneous spillover of knowledge affect economic geography? ——An extended local spillover model," Socio-Economic Planning Sciences, Elsevier, vol. 83(C).
    9. 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.
    10. Davis, Donald R. & Dingel, Jonathan I., 2020. "The comparative advantage of cities," Journal of International Economics, Elsevier, vol. 123(C).
    11. Mariko Nakagawa, 2015. "Segregation patterns in cities: ethnic clustering without skill differences," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 55(2), pages 453-483, December.
    12. Kohei Nagamachi, 2012. "Comparative Advantage and Skill Premium of Regions," CIRJE F-Series CIRJE-F-868, CIRJE, Faculty of Economics, University of Tokyo.
    13. Pablo Fajgelbaum & Cecile Gaubert, 2018. "Optimal Spatial Policies, Geography and Sorting," NBER Working Papers 24632, National Bureau of Economic Research, Inc.
    14. Watanabe, Axel, 2020. "The Size Distribution of Cities with Distance-Bound Households," MPRA Paper 99746, University Library of Munich, Germany.
    15. Leonid V Azarnert, 2023. "Population sorting and human capital accumulation," Oxford Economic Papers, Oxford University Press, vol. 75(3), pages 780-801.
    16. Jacques-Francois Thisse, 2016. "The Competitive Paradigm in Spatial Economics," HSE Working papers WP BRP 151/EC/2016, National Research University Higher School of Economics.
    17. Stephan Heblich & Stephen J Redding & Daniel M Sturm, 2020. "The Making of the Modern Metropolis: Evidence from London," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 135(4), pages 2059-2133.
    18. Oshiro, Jun & Sato, Yasuhiro, 2021. "Industrial structure in urban accounting," Regional Science and Urban Economics, Elsevier, vol. 91(C).
    19. Albouy, David & Behrens, Kristian & Robert-Nicoud, Frédéric & Seegert, Nathan, 2019. "The optimal distribution of population across cities," Journal of Urban Economics, Elsevier, vol. 110(C), pages 102-113.
    20. Alberto Franco Pozzolo, 2004. "Research and Development, Regional Spillovers and the Location of Economic Activities," Manchester School, University of Manchester, vol. 72(4), pages 463-482, July.
    21. Christian Ochsner, 2017. "Dismantled once, diverged forever? A quasi-natural experiment of Red Army misdeeds in post-WWII Europe," ifo Working Paper Series 240, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.

    More about this item

    JEL classification:

    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

    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:wiw:wiwrsa:ersa14p985. 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: Gunther Maier (email available below). General contact details of provider: http://www.ersa.org .

    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.