First Nature, Second Nature, and Metropolitan LocationThis paper develops models of spatial equilibrium in which a central metropolis emerges to supply manufactured goods to an agricultural hinterland. The location of the metropolis is not fully determined by the location of resources: as long as it is not too far from the geographical center of the region, the concentration of economic mass at the metropolis makes it the optimal location for manufacturing firms, and is thus self-justifying. The approach in this paper therefore helps explain the role of historical accident and self-fulfilling expectations in metropolitan location. |
Common terms and phrases
3740 NATIONAL BUREAU agricultural workers alternate location approach assumption backward linkage Bureau of Economic Caballero Eduardo central metropolis Central place theory concentration of economic consumer at location contour lines Cronon David Card disk Dixit-Stiglitz model Durlauf dy dx economic mass Economic Research equilibrium metropolitan location evenly factor of production Figure firms Gary Gorton geographical geometric center hypothetical metropolis incentive kink large number left of center Louis Kaplow manufacturing is concentrated manufacturing workers market potential line market potential map Massachusetts Avenue metropolis located metropolitan centers metropolitan concentration monopolistically competitive off-center metropolis one-dimensional model one-dimensional region optimal Output Path Dependence peak market potential posit a metropolis potential metropolitan locations potential metropolitan sites potential sites production range of potential RELATIONS/PACIFIC STUDIES LIBRARY relative real wage relative wage rate SAN DIEGO SECOND NATURE single metropolis site x spatial equilibrium Stanley Fischer Steven Steven N transport costs two-dimensional unit interval UNIVERSITY OF CALIFORNIA x₁