A Unified Theory of Cities / Jacques-François Thisse, Matthew Turner, Philip Ushchev.

Format:

Book

Author/Creator:

Thisse, Jacques-François.

Contributor:

National Bureau of Economic Research.

Turner, Matthew.

Ushchev, Philip.

Series:

Working Paper Series (National Bureau of Economic Research) no. w29078.

NBER working paper series no. w29078

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2021.

Summary:

How do people arrange themselves when they are free to choose work and residence locations, when commuting is costly, and when increasing returns may affect production? We consider this problem when the location set is discrete and households have heterogenous preferences over workplace-residence pairs. We provide a general characterization of equilibrium throughout the parameter space. The introduction of preference heterogeneity into an otherwise conventional urban model fundamentally changes equilibrium behavior. Multiple equilibria are pervasive although stable equilibria need not exist. Stronger increasing returns to scale need not concentrate economic activity and lower commuting costs need not disperse it. The qualitative behavior of the model as returns to scale increase accords with changes in the patterns of urbanization observed in the Western world between the pre-industrial period and the present.

Notes:

Print version record

July 2021.