Spatial Frictions

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

doi:10.2139/ssrn.2210835

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Spatial Frictions

IZA Discussion Paper No. 7175

64 Pages Posted: 2 Feb 2013

See all articles by Kristian Behrens

Kristian Behrens

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

University of Sussex - Department of Economics; London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP); Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute)

Yasusada Murata

Nihon University - Advanced Research Institute for the Sciences and Humanities

Jens Suedekum

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)

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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 toughness of competition in cities? The short answers are: no; yes; and it depends.

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

JEL Classification: F12, R12

Suggested Citation: Suggested Citation

Behrens, Kristian and Mion, Giordano and Murata, Yasusada and Südekum, Jens, Spatial Frictions. IZA Discussion Paper No. 7175, Available at SSRN: https://ssrn.com/abstract=2210835 or http://dx.doi.org/10.2139/ssrn.2210835