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A TRACTABLE CITY MODEL FOR AGGREGATIVE ANALYSIS
Author(s) -
Chatterjee Satyajit,
Eyigungor Burcu
Publication year - 2017
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/iere.12211
Subject(s) - downtown , economics , welfare , population , central business district , econometrics , exponential function , boundary (topology) , general equilibrium theory , microeconomics , mathematical economics , mathematics , geography , engineering , mathematical analysis , demography , archaeology , sociology , transport engineering , market economy
An analytically tractable city model with external increasing returns is presented. The equilibrium city structure is either monocentric or decentralized. Regardless of which structure prevails, intracity variation in endogenous variables displays exponential decay from the city center, where the decay rates depend only on parameters. Given population, the equilibrium of the model is generically unique. Tractability permits explicit expressions for when a central business district (CBD) will emerge in equilibrium, how external increasing returns affect the steepness of downtown rent gradients, and how wages and welfare vary with population. An application to urban growth boundary is presented.