In this paper we describe the development of regional specialisation and geographical concentration in Germany between 1993 and 2001. Somewhat contrary to theoretical expectations derived from the recent literature in location theory, we neither find compelling evidence for a specialisation...

This paper studies the social desirability of agglomeration and the efficiency arguments for regional policy in a simple, analytically solvable ‘new economic geography’ model with two trade integrating regions. The location pattern emerging as market equilibrium is ?-shaped, featuring...

We analyze the first data set on consistently defined functional urban areas in Europe and compare the European to the US urban system. City sizes in Europe do not follow a power law: the largest cities are ?too small? to follow Zipf?s law.

There has been vast interest in the distribution of city sizes in an economy, but this research has largely neglected that cities also differ along another fundamental dimension: age. Using novel data on the foundation dates of more than 10,000 American cities, we find that older cities in the...

Many countries operate pronounced fiscal equalization schemes that shift tax revenue across jurisdictions. We use a general equilibrium model with multiple asymmetric regions, costly trade and labor mobility to carve out the aggregate implications of this policy. Calibrating the model for...

The home market effect (HME) is a distinguishing feature of the ?new? theory of international trade, but it is uncertain whether this effect survives if one moves beyond the simplifying setup with only two countries. We present a three -country version of the seminal model by Krugman (1980) and...

The world is replete with spatial frictions. Shipping goods across cities entails trade frictions. Commuting within cities causes urban frictions. How important are these frictions in shaping the spatial economy? We develop and quantify a novel framework to address this question at three...

We analyze the first data set on consistently defined functional urban areas in Europe and compare the European to the US urban system. City sizes in Europe do not follow a power law: the largest cities are "too small" to follow Zipf's law.

We analyze the first data set on consistently defined functional urban areas in Europe and compare the European to the US urban system. City sizes in Europe do not follow a power law: the largest cities are “too small” to follow Zipf’s law.

In this paper we show that the double Pareto lognormal (DPLN) parameterization provides an excellent fit to the overall US city size distribution, regardless of whether cities are administratively defined Census places or economically defined area clusters. We then consider an economic model...