Spatial scale of agglomeration and dispersion: Number, spacing, and the spatial extent of cities

Abstract

How does transport cost affect the spatial organization of economic activities? This study develops a theoretical framework that distinguishes between two types of dispersion forces in spatial models: "local" dispersion forces acting within cities, and "global" dispersion forces acting across them. The distinction leads to a systematic classification of spatial models into a few fundamental types, each with distinct endogenous spatial patterns and comparative statics in response to changes in transport costs. The framework reconciles empirical findings and clarifies how transport-induced reorganization of economic activities can depend on the spatial scale of dominant dispersion forces.