Transport Development and the Evolution of Economic Geography

Discussion Papers


by FUJITA Masahisa and MORI Tomoya

January 2005


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.

Keywords: new economic geography, transport cost, industrial belt
JEL classification: R12

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