Economic Theory

Download e-book for kindle: Economic geography: the integration of regions and nations by PP Combes

By PP Combes

ISBN-10: 0691124590

ISBN-13: 9780691124599

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Extra info for Economic geography: the integration of regions and nations

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Even though it is not necessary to postulate the existence of a large number of agents to establish the existence of a competitive equilibrium, it is hard to escape this assumption if we want to justify the fact that agents are price-takers. Of course, it could be assumed, as in the work of von Thünen, that goods are made available in marketplaces (city centers, for example) in which a large number of agents must trade them. But that is simply to put off the evil day: why must transactions be made in such given places and how are their number and location determined?

2 Motorization of Transport and Urbanization The second feature marking the economic development of Europe is the almost perfect synchronization of the Industrial Revolution and urbanization due mainly to the advent of motorized transportation (steamboats, railroads, and finally automobiles). Steam navigation began in the United States in 1807 and the first railroad line was built in England in 1825. Although the urban population in Europe (outside Russia) in 1800 corresponded to only 12% of the total population, it reached 41% in 1910 and it is now 75%; a similar evolution arose in the United States, where the urban population share was 5% in 1800, 42% in 1910, and was close to 75% by 2005 (Bairoch 1988, chapter 13).

97) A last comment is in order. In his detailed study of economic thought in the eighteenth and nineteenth centuries, Lepetit (1988, chapter 10) sees the abandonment of space as a dividing line between preclassical and classical authors. Classical political economy focuses on general factors that are assumed to be the same in all places. Location-specific factors are confined to descriptive studies of particular regions and cities. When classical economists deal with the spatial organization of the economy, they do so quite crudely, thus leading Lepetit to summarize their approach as follows: from the countryside to the city, the nature of productions differs, but there is homology among the different levels of spatial organization (the country, the region, the city, the village) and an identity of their principles of functioning.

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Economic geography: the integration of regions and nations by PP Combes


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