Agglomeration and Market Interaction

52 Pages Posted: 20 Jun 2002

See all articles by Masahisa Fujita

Masahisa Fujita

Kyoto University - Institute of Economic Research

Jacques-François Thisse

Catholic University of Louvain (UCL); Centre for Economic Policy Research (CEPR)

Date Written: May 2002

Abstract

The most salient feature of the spatial economy is the presence of a large variety of economic agglomerations. Our purpose is to review some of the main explanations for this universal phenomenon, as they are proposed in urban economics and modern economic geography. We first show why the competitive framework can hardly be the foundation for the economics of agglomeration. We then briefly review the alternative modelling strategies. In the hope of making our Paper accessible to a broad audience, we present in detail the two (specific) models that have been used so far to study the spatial distribution of economic activities. Several extensions of these models are discussed in the subsequent section. We conclude with some suggestions for further research and policy implications.

Suggested Citation

Fujita, Masahisa and Thisse, Jacques-François, Agglomeration and Market Interaction (May 2002). CEPR Discussion Paper No. 3362. Available at SSRN: https://ssrn.com/abstract=315966

Masahisa Fujita (Contact Author)

Kyoto University - Institute of Economic Research ( email )

Yoshida-Honmachi
Sakyo-ku
Kyoto 606-8501
Japan
+81 75 753 7122 (Phone)
+81 75 753 7198 (Fax)

Jacques-François Thisse

Catholic University of Louvain (UCL) ( email )

Place des Doyens 1
Louvain-la-Neuve, 1348
Belgium

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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