General Geographical Economics Model with Congestion

Tinbergen Institute Discussion Paper No. TI 2005-100/2

21 Pages Posted: 17 Nov 2005

See all articles by Charles van Marrewijk

Charles van Marrewijk

Utrecht University - School of Economics

Date Written: October 2005

Abstract

We derive and discuss a general, but simple geographical economics model with congestion, allowing us to explain the economic viability of small and large locations. The model generalizes some previous work and lends itself to analyzing the impact of public policy in terms of infrastructure changes. We show analytically that scale effects (total size of the economy) and changes in the cost structure (fixed and marginal costs) are important from a welfare perspective, but largely irrelevant from an economic dynamics perspective.

Keywords: Geographical economics, congestion, externalities

Suggested Citation

van Marrewijk, Charles, General Geographical Economics Model with Congestion (October 2005). Tinbergen Institute Discussion Paper No. TI 2005-100/2, Available at SSRN: https://ssrn.com/abstract=846344 or http://dx.doi.org/10.2139/ssrn.846344

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Utrecht University - School of Economics ( email )

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