The Economics of Agglomeration

  title={The Economics of Agglomeration},
  author={Masahisa Fujita and Jacques-François Thisse},
  journal={Oxford Research Encyclopedia of Economics and Finance},
Despite the drop in transport and commuting costs since the mid-19th century, sizable and lasting differences across locations at very different spatial scales remain the most striking feature of the space-economy. The main challenges of the economics of agglomeration are therefore (a) to explain why people and economic activities are agglomerated in a few places and (b) to understand why some places fare better than others. To meet these challenges, the usual route is to appeal to the… 
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