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.
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