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Transport Development and the Evolution of Economic Geography

Discussion Papers

No.021

by FUJITA Masahisa and MORI Tomoya
January 2005

ABSTRACT

In this paper, based on the recent advances in the new economic geography (e.g., Fujita, Krugman and Venables [12]), we analyze impacts of transport costs on the spatial patterns of economic agglomeration. We first identify prototypes from the existing models, and explain the mechanism of how transport costs influence the balance between economic forces of agglomeration and dispersion. We then investigate the transformation of the agglomeration/dispersion patterns given gradually decreasing transport costs for different goods.

<b>Keywords:</b> new economic geography, transport cost, industrial belt
<b>JEL classification:</b> R12

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