Spatial Frictions

Behrens, Kristian; Mion, Giordiano; Murata, Yasusada; Suedekum, Jens

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Spatial Frictions

CEPR Discussion Paper No. DP8572

63 Pages Posted: 21 Sep 2011

See all articles by Kristian Behrens

Kristian Behrens

University of Quebec at Montreal (UQAM) - Department of Economics

Heinrich-Heine-University Duesseldorf, Duesseldorf Institute for Competition Economics (DICE); Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); Institute for the Study of Labor (IZA)

There are 2 versions of this paper

Date Written: September 2011

Abstract

The world is replete with spatial frictions. Shipping goods across cities entails trade frictions. Commuting within cities causes urban frictions. How important are these frictions in shaping the spatial economy? We develop and quantify a novel framework to address this question at three different levels: Do spatial frictions matter for the city-size distribution? Do they affect individual city sizes? Do they contribute to the productivity advantage of large cities and the nature of competition in cities? The short answers are: no, yes, and it depends.

Keywords: city-size distribution, markups, productivity, trade frictions, urban frictions

JEL Classification: F12, R12

Suggested Citation: Suggested Citation

Behrens, Kristian and Mion, Giordiano and Murata, Yasusada and Südekum, Jens, Spatial Frictions (September 2011). CEPR Discussion Paper No. DP8572, Available at SSRN: https://ssrn.com/abstract=1931081