On the Number and Size of Cities

39 Pages Posted: 16 Jul 2002

See all articles by Takatoshi Tabuchi

Takatoshi Tabuchi

University of Tokyo - Faculty of Economics

Jacques-François Thisse

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

Dao-Zhi Zeng

Tohoku University - Graduate School of Information Sciences

Date Written: May 2002

Abstract

We study the effects of a decrease in trade costs on the spatial distribution of industry in a multi-regional economy, when a rise in the regional population of workers generates higher urban costs. When the number of cities is unaffected by falling trade costs, small cities become smaller for large trade costs, medium-sized cities become smaller for medium values of trade costs, and large cities become smaller for small trade costs. Furthermore, when urban costs are 'identical,' we show that there exists a path of stable equilibria such that the industry, first, experiences progressive agglomeration into a decreasing number of cities and, then, dispersion into a growing number of cities. The second phase arises because of the increasing urban costs associated with the process of agglomeration.

Keywords: Multi-regional system, multiplicity of equilibria, city, agglomeration, transport costs, urban costs

JEL Classification: F12, L13, R13

Suggested Citation

Tabuchi, Takatoshi and Thisse, Jacques-François and Zeng, Dao-Zhi, On the Number and Size of Cities (May 2002). CEPR Discussion Paper No. 3386. Available at SSRN: https://ssrn.com/abstract=317683

Takatoshi Tabuchi (Contact Author)

University of Tokyo - Faculty of Economics ( email )

7-3-1 Hongo, Bunkyo-ku
Tokyo 113-0033
Japan
+81 3 5841 5603 (Phone)
+81 3 5841 5521 (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

Dao-Zhi Zeng

Tohoku University - Graduate School of Information Sciences ( email )

Aramaki aza Aoba 6-3-09, Aoba-ku
Sendai, Miyagi 980-8579
Japan
+81 22 795 4380 (Phone)
+81 22 795 4380 (Fax)

HOME PAGE: http://www.se.is.tohoku.ac.jp/~zeng/eng.html

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