Further Issues on Cities

Abstract

This book applied the basic concepts and frameworks on growth theory (without space) and trade theory by Zhang (1999, 2000) to explore complex interdependence between economic growth and spatial pattern formation with endogenous capital and knowledge. Since our main purpose was to construct a theoretical framework to synthesize urban economics and neoclassical growth theory in a consistent way, we were concerned only with simplified structures of spatial economies. However, it is not difficult to extend the models in this book to examine other situations of spatial economies. For instance, as in Beckmann (1968), we may distinguish four different locational patterns according to the space requirements of producers and the population density of consumers: (1) producers and consumers are concentrated at point locations and in point markets; (2) producers are located in points, consumers extended through the market area; (3) consumers are concentrated at points, producers dispersed; and (4) both producers and consumers are extended through the market area. We may treat space in spatially continuous frameworks (Beckmann and Puu, 1985, Andersson and Zhang, 1988, Zhang, 1988a, 1988b, 1989b, 1989c). This book explored the complexity of spatial economies within a perfectly competitive framework. Our focus on perfect competition with endogenous capital and knowledge is different from the contemporary mainstream of spatial economics that is mainly concerned with monopolistic competition or fixed prices frameworks (e.g., Arnott, 1996a, 1996b, Greenhut, Norman, and Hung, 1987).