Center Research Seminar. Speaker: Maxim Goryunov
HSE Center for Market Studies and Spatial Economics held a regular research seminar on the topic: "Evolution of the system of cities under globalization". Speaker: Ph.D. student Maxim Goryunov (CERGE-EI, Prague)
A report on "Evolution of the system of cities under globalization" by MSSE Guest Ph.D. student Maxim Goryunov (CERGE-EI, Prague).
Following Anas (2004) we consider a basic model of monopolistic competition to address the question of the efficiency of urbanization: What number of cities is desirable when consumption, production and trade among them are allowed to be determined by market mechanism? We show that original result — decreasing optimal size of the representative city with increase of population (or equivalently, decrease in transport cost) — is robust to the extension of the model on the large class of utility functions. Moreover, sufficiently large population size (sufficiently low transport cost) lead to the efficient city size equal to technologically minimal. This result can be treated as similar to Henderson (1974) since in every city increasing returns in production of only one good are exploited. In addition we show possibility of autarchy as optimal outcome for special class of utility functions.
Address of the seminar: Room 205, 3, 10th Line VO.