ABSTRACT
Introduction One way to think of one’s own city is as a point on the globe engaged in trade with many other places in one’s own country and often beyond. This is how we start our inquiry into urban economics or the economic analysis of cities. Often when people think of their city, they think of the downtown and their neighborhood and perhaps the airport and the local stadium. This involves thinking about the internal structure of a city, a standard perspective in urban economics. A third perspective might be the fiscal health of one’s city-how much concern is being expressed about high property taxes, and difficulties about councillors balancing the city’s budget. We will of course get to the economics of the internal structure of a city as well as issues in city budgeting and revenue generation. First, however, we deal with a city as a trading entity living off exports, so to speak. Early urban economists spoke of a city’s basic activity (exporting key commodities) and its non-basic activity (local retail and government, and production for the local market). Our model of a city as trader, below, will comprise the city’s export activity, its residential activity, its government activity and its production of a local or non-traded good.
