First Nature, Second Nature, and Metropolitan Location

Abstract

This paper develops models of spatial equilibrium in which a central metropolis emerges to supply manufactured goods to an agricultural hinterland. The location of the metropolis is not fully determined by the location of resources: as long as it is not too far from the geographical center of the region, the concentration of economic mass at the metropolis makes it the optimal location for manufacturing firms, and is thus self-justifying. The approach in this paper therefore helps explain the role of historical accident and self-fulfilling expectations in metropolitan location.