Urban growth and subcenter formation: A trolley ride from the Staples Center to Disneyland and the Rose Bowl

Berliant, Marcus and Wang, Ping (2007): Urban growth and subcenter formation: A trolley ride from the Staples Center to Disneyland and the Rose Bowl.

Abstract

The long-term trends of urbanization suggest: not only have more cities formed, but the leading metropolises have grown larger, with a number of peripheral subcenters developing over time. Conventional models of urban growth are limited, in that commuting cost and congestion eventually result in decreasing returns in a monocentric city as population becomes very large. We construct a general-equilibrium model with dynamic interactions between spatial agglomeration and urban development, driven by location-dependent knowledge spillovers. Our contribution allows endogenous development of subcenters to capture benefits from knowledge spillovers and offset diminishing returns from urban congestion, thus permitting more sustained city growth.

• Item Type: MPRA Paper
• Institution: Washington University in St. Louis
• Language: English
• Keywords: Core-Periphery Urban Structure; Agglomerative Production Activity; Endogenous Formation of Cities
• Subjects: R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R12 - Size and Spatial Distributions of Regional Economic Activity; D - Microeconomics > D5 - General Equilibrium and Disequilibrium > D51 - Exchange and Production Economies; C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C78 - Bargaining Theory ; Matching Theory

References

H. Abdel-Rahman, P. Wang, Toward a general-equilibrium theory of a core-periphery system of cities, Regional Science and Urban Economics 25 (1995) 529--546. A. Anas, Vanishing cities: what does the new economic geography imply about the efficiency of urbanization?, Journal of Economic Geography 4 (2004) 181--199. A. Anas, H.-J. Rhee, Curbing excess sprawl with congestion tolls and urban boundaries, Regional Science and Urban Economics 36 (2006) 510--541. A. Anas, K. Xiong, Intercity trade and the industrial diversification of cities, Journal of Urban Economics 54 (2003) 258--276. R. Baldwin, R. Forslid, The core-periphery model and endogenous growth: Stabilising and de-stabilising integration, Economica 67 (2000) 307--324. M. Berliant, S. Peng, P. Wang, Production externalities and urban configuration, Journal of Economic Theory 104 (2002) 275--303. M. Berliant, R. Reed, P. Wang, Knowledge Exchange, Matching, and Agglomeration, Journal of Urban Economics 60 (2006) 69--95. M. Berliant, P. Wang, Dynamic urban models: agglomeration and growth, in: R. Capello and P. Nijkamp (eds.), Urban Dynamics and Growth: Advances in Urban Economics, North-Holland, Amsterdam, 2004, 533--581. J.K. Brueckner, Urban growth boundaries: An effective second-best remedy for unpriced traffic congestion?, Mimeo, University of California, Irvine, CA, 2005. M. Fujita, Urban Economic Theory, Cambridge University Press, Cambridge, 1989. M. Fujita, P., Krugman, When is the economy monocentric?: von Thünen and Chamberlin unified, Regional Science and Urban Economics 25 (1995) 505--528. M. Fujita, T. Mori, Structural stability and evolution of urban systems, Regional Science and Urban Economics 27 (1997) 399--442. M. Fujita, F. Ogawa, Multiple equilibria and structural transition of non-monocentric urban configurations, Regional Science and Urban Economics 12 (1982) 161--196. M. Fujita, J.-F. Thisse, Economics of Agglomeration, Cambridge University Press, Cambridge, 2002. M. Fujita, J.-F. Thisse, Y. Zenou, On the Endogenous Formation of Secondary Employment Centers in a City, Journal of Urban Economics 41 (1997) 337--357. J.V. Henderson, A. Mitra, The new urban landscape: developers and edge cities, Regional Science and Urban Economics 26 (1996) 613--643. J.V. Henderson, E. Slade, Development games in non-monocentric cities, Journal of Urban Economics 34 (1993) 207--229. J. Jacobs, The Economy of Cities, Random House, New York, NY, 1969. P. Krugman, On the number and location of cities, European Economic Review 37 (1993) 293--298. R.E. Lucas, Jr., E. Rossi-Hansberg, On the internal structure of cities, Econometrica 70 (2002) 1445--1476. D.P. McMillen, S.C. Smith, The number of subcenters in large urban areas, Journal of Urban Economics 53 (2003) 321--338. M. Ogawa, M. Fujita, Equilibrium land use patterns in a nonmonocentric city, Journal of Regional Science 20 (1980) 455--475. P. Romer, Increasing returns and long-run growth, Journal of Political Economy 94 (1986) 1002--1037. S. Rosenthal, W. Strange, Geography, industrial organization, and agglomeration, Review of Economics and Statistics 85 (2003) 377--393. A. Saxenian, Regional Advantage: Culture and Competition in Silicon Valley and Route 128, Harvard University Press, Cambridge, MA, 1994. K. Shell, Toward a theory of inventive activity and capital accumulation, American Economic Review 61 (1966) 62--68.