While transport costs have fallen, the empirical evidence also points at rising total trade costs. In a model of industry location with endogenous transaction costs, we show how and under which conditions a decline in transport costs can lead to an increase in the total cost of trade.

Cet article propose une analyse du zonage à partir d'une modélisation explicite des économies d'agglomération. Au sein de chaque zone, les firmes et les ménages sont en concurrence pour occuper le sol. Le transport pour aller d'une zone à l'autre est soumis à de la congestion....

Large cities produce more output per capita than small cities. This may occur because more talented individuals sort into large cities, because large cities select more productive entrepreneurs and firms, or because of agglomeration economies. We develop a model of systems of cities that...

This study first summarises the forces that affect positively and negatively the spatial concentration of economic activity, and the bell curve that links general transaction costs to regional disparities. The specific role played by local labour markets is then detailed. While spatial...

We investigate the relationship between interstate highways and highway vehicle kilometers traveled (vkt) in US cities. We find that vkt increases proportionately to highways and identify three important sources for this extra vkt: an increase in driving by current residents; an increase in...

Spatial wage disparities can result from spatial differences in the skill composition of the workforce, in non-human endowments, and in local interactions. To distinguish between these explanations, we estimate a model of wage determination across local labour markets using a very large panel of...

In this paper, the evolution of product differentiation in industries is modeled as the result of a cumulative cost-reduction process subject to spillovers in a differentiated oligopoly. Our results suggest that the long-run outcome is dependent on the intensity of spillovers and the shape of...