Economics of Agglomeration

Masahisa Fujita, a member of the Japan Academy and the President of the Research Institute of Economy, Trade and Industry, has been a major contributor to spatial economic theory during his twenty-year tenure at the University of Pennsylvania and more recently at Kyoto University and Konan University. Professor Fujita is the author or co-author of three books: Spatial Development Planning (1978); Urban Economic Theory (Cambridge, 1989), which remains to this day the most authoritative graduate textbook on urban economics; and The Spatial Economy (1999, co-authored with Paul Krugman and A. J. Venables), which defines the field of new economic geography. Jacques-François Thisse, a fellow of the Econometric Society and of the Regional Science Association International, is Professor of Economics at the Université Catholique de Louvain (Belgium) and the Higher School of Economics (Russia). He has published in numerous journals, including the American Economic Review, Econometrica, the Journal of Political Economy, the International Economic Review, Management Science, Exploration in Economic History, and the Journal of Economic Geography. He is the co-author of Discrete Choice Theory of Product Differentiation, Economic Geography, and Economic Geography and the Unequal Development of Regions. Professors Fujita and Thisse co-authored the first edition of Economics of Agglomeration: Cities, Industrial Location, and Regional Growth (Cambridge, 2002).

• 1. Agglomeration and economic theory; Part I. Fundamentals of Spatial Economics: 2. The breakdown of the price system in a spatial economy; 3. The von Thünen model and land rent formation; 4. Increasing returns vs. transportation costs: the fundamental trade-off of spatial economics; 5. Cities and the public sector; Part II. The Structure of Metropolitan Areas: 6. The spatial structure of cities under communication externalities; 7. The formation of urban centers under imperfect competition; Part III. Factor Mobility and Industrial Location: 8. Industrial agglomeration under monopolistic competition; 9. Market size and industrial clusters; Part IV. Urban Systems, Regional Growth, and the Multinationalization of Firms: 10. Back to von Thünen: the formation of cities in a spatial economy; 11. Globalization, growth, and the geography of the supply chain.

'Two of the best regional scientists share with us what they have learned about the economics of agglomeration. This splendid book shows that different strands in the literature rely on the same common principles that define agglomeration economies. The authors show how these common principles can help us to understand the spatial distribution of economic activity. Although the book is mostly about theory, lucid and stylized examples illustrate the theories. Economics of Agglomeration, Second Edition is essential reading for graduate students in regional and urban economics for years to come.' Steven Brakman, University of Groningen