Abstract
This chapter presents a basic model to analyze regional or spatial economics. Although most economic theories have devoted some attention to space or distance, those factors should not be omitted from stricter economic analysis. For instance, traditional international economic theories such as the Ricardo model or Heckscher–Ohlin model do not incorporate the concept of distance. However, it is not natural to address the trade of goods among countries without considering their transportation cost. Recently many people have been interested in regional economics, urban economics, and spatial economics because they have realized their importance.
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Notes
- 1.
For a detailed explanation of this utility function, see Ottaviano, Tabuchi, and Thisse [5].
- 2.
Here we assume that the initial endowment is sufficiently large.
- 3.
Though Krugman [4] considers both marginal labor input and fixed labor input, this model requires no marginal labor input to produce the manufactured goods. Therefore, we consider this Ï• as the measure of the degree of increasing returns to scale.
- 4.
Equilibrium price p HH ∗ is a decreasing function of N because\(\frac{\partial p_{HH}^{{\ast}}} {\partial N} = -c \frac{a-b\lambda \tau } {{\left (2b+Nc\right )}^{2}} <0\) under the circumstances in which a is sufficiently large.
- 5.
Subsequently, we analyze the model under the (2.22).
- 6.
Differentiating (2.26) with respect to λ, one finds that \(\frac{d^{2}S_{H}(\lambda )} {d\lambda ^{2}}\) is negative. Consequently, S H (λ) is concave.
- 7.
For detailed discussion about these properties, see Ottaviano, Tabuchi, and Thisse [5]. Moreover, both C o and \(\bar{M}\) are positive irrespective of λ.
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Naito, T. (2016). Regional Agglomeration and Spatial Economics. In: Naito, T. (eds) Sustainable Growth and Development in a Regional Economy. New Frontiers in Regional Science: Asian Perspectives, vol 13. Springer, Tokyo. https://doi.org/10.1007/978-4-431-55294-9_2
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DOI: https://doi.org/10.1007/978-4-431-55294-9_2
Publisher Name: Springer, Tokyo
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