The Competitive Paradigm in Spatial Economics
17 Pages Posted: 28 Sep 2016
Date Written: September 27, 2016
This paper discusses the reasons for the spatial impossibility theorem, which states that the competitive paradigm cannot explain the formation of large urban agglomerations and trade flows. This result is especially meaningful insofar as it is internal to the theory itself. We then briefly explores different solutions to remedy to this methodological failure.
Keywords: space, transport costs, land rent, general equilibrium
JEL Classification: D50; F12; Q54; Q58; R13
Suggested Citation: Suggested Citation