CIRJE-F-454 "Trade and the structure of cities"
Author Name Jean Cavailhes, Carl Gaigne, Takatoshi Tabuchi and Jacques-Francois Thisse
Date December 2006
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Remarks Subsequenly published in Journal of Urban Economics, 62 (2007), 383-404.@
Abstract

Our purpose is to investigate how the interplay between trade, commuting and communication costs shapes the economy at both the interregional and intra-urban levels. Specifically, we study how economic integration affects the internal structure of cities and show how decentralizing the production and consumption of goods in secondary employment centers allows firms located in a large city to maintain their predominance. Several new results in both economic geography and urban economics are established, which all agree with empirical evidence.