chapter  1
11 Pages

Agglomeration 1

WithYorgos Y Papageorgiou

Complexity renders futile any attempt to seek the model of agglomeration. In consequence each of a growing number of theoretical studies concentrates on some particular aspect, thereby contributing to the list of known, partially interconnected, reasons for the existence of cities. Within this literature, three main classes of reasons for agglomeration may be identified: the city as a centre of production, the city as a public good and the city as a marketplace. The chapter discusses how certain market activities potentially benefit from physical proximity to each other, thus creating agglomeration in the long run—the centre. The precise nature of such agglomeration advantages is determined through comparisons of two states of the system, a dispersed state and an agglomerated state. The aggregate nature of agglomeration economies has already been stressed. In this world agglomeration economies imply agglomeration. Otherwise agglomeration economies do not persist, a contradiction. This single node represents the centre around which the city will unfold.