Year: 1993
Type: article
Abstract: ABSTRACT. Economies of scale, transportation costs, and factor mobility can interact to produce agglomerations even in the absence of any pure external economies. This paper offers a monopolistic competition model of a city that serves an agricultural hinterland; unlike most analyses in location theory, the model is fully general equilibrium, but it has strong links to older concepts in geography, notably the idea of “market potential.” The analysis shows that the forward and backward linkages that hold a population concentration together also allow that concentration to occur in a variety of possible sites—that is, there are multiple equilibria (indeed a continuum) for metropolitan location.
Source: Journal of Regional Science
Author: Paul Krugman
Institution: Massachusetts Institute of Technology
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2890698629