Is Agglomeration Desirable?

Candau, Fabien

doi:10.2139/ssrn.1393183

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Is Agglomeration Desirable?

25 Pages Posted: 22 Apr 2009

See all articles by Fabien Candau

Fabien Candau

Université de Pau et des Pays de l'Adour

Date Written: April 22, 2009

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.

Keywords: Economic geography, Cities, Trade, Welfare

JEL Classification: F12, R13

Suggested Citation: Suggested Citation

Candau, Fabien, Is Agglomeration Desirable? (April 22, 2009). Available at SSRN: https://ssrn.com/abstract=1393183 or http://dx.doi.org/10.2139/ssrn.1393183