We theoretically study a general family of economic geography models that features endogenous agglomeration. In many-region settings, the spatial scale---global or local---of the dispersion force(s) in a model plays a key role in determining the resulting endogenous spatial patterns and comparative statics. A global dispersion force accrues from competition between different locations and leads to the formation of multiple economic clusters , or cities . A local dispersion force is caused by crowding effects within each location and induces the flattening of each city. By distinguishing local and global dispersion forces, we can reduce a wide variety of extant models into only three prototypical classes that are qualitatively different in implications . Our framework adds consistent interpretations to the empirical literature and also provides general predictions on treatment effects in structural economic geography models.
We study a general family of economic geography models that features endogenous agglomeration. In many-region settings, the spatial scale---"global" or "local"---of the dispersion force(s) in a model plays a key role in determining the resulting endogenous spatial patterns and comparative statics. A global dispersion force accrues from competition between different locations and leads to the formation of multiple economic clusters (or cities) . A local dispersion force is caused by crowding effects within each location and induces the flattening of each city. By distinguishing local and global dispersion forces, we can define three prototypical classes, namely, models that have only global, only local, and both local and global dispersion forces. The three model classes engender qualitatively different spatial patterns. Multiple cities are formed only when a global dispersion force is at work; otherwise, only a unimodal distribution can be formed. A city can have its spatial extent only when a local dispersion force is at work. A wide variety of extant models are reduced into the three prototypical classes . Our framework adds consistent interpretations to the empirical literature and also provides general treatment effects in structural economic geography models.
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define three prototypical classes, namely, models that have only global, only local, and both local and global dispersion forces. The three model classes engender qualitatively different spatial patterns. Multiple cities are formed only when a global dispersion force is at work; otherwise, only a unimodal distribution can be formed. A city can have its spatial extent only when a local dispersion force is at work. A
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