Agglomerations in a multi-region economy: Poly-centric versus mono-centric patterns

Takashi Akamatsu (), Tomoya Mori and Yuki Takayama ()
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Takashi Akamatsu: Graduate School of Information Sciences, Tohoku University

No 929, KIER Working Papers from Kyoto University, Institute of Economic Research

Abstract: Agglomeration externalities have been recognized as major sources of lumpy spatial distributions of industries and population. While the abstraction of interregional space has been a common exercise, recent increasing availability of disaggregated geographical data and more sophisticated computational techniques have promoted counterfactual analyses based on many-region models of agglomeration externalities with explicit interregional space (e.g., Redding and Sturm, 2008; Allen and Arkolakis, 2014). A caveat is that incorporating interregional space to a many-region model with agglomeration externalities does not by itself warrant the formation of polycentric agglomerations in stable equilibria—a crucial property in order to replicate the observed geography of agglomerations. We elaborate this point by comparing a pair of new economic geography models, Forslid and Ottaviano (2003) and Helpman (1998). In a two-region economy, these models exhibit both “agglomeration†(i.e., a relative concentration of mobile agents in one of the regions) and “dispersion†(i.e., a uniform distribution of mobile agents across the two regions). But, if the location space were more disaggregated, only the former admits poly-centric agglomerations in stable equilibria, while in the latter, only a mono-centric agglomeration can occur if any.

Keywords: new economic geography model; many-region model; multiple agglomerations; stability; bifurcation (search for similar items in EconPapers)
JEL-codes: C62 F15 F22 R12 R13 (search for similar items in EconPapers)
Pages: 48pages
Date: 2015-10
New Economics Papers: this item is included in nep-geo and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Related works:
Working Paper: Agglomerations in a Multi-region Economy: Polycentric versus monocentric patterns (2016)
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