Spatial Economics

The purpose of this monograph is to reintroduce the two-dimensional continuum as the natural spatial setting of economic activities and to exploit the idea for all its worth. Interaction between agents is viewed as flows of commodities or persons. Flows are generated by production and consumption activities representing sources and sinks of a flow field. The direction of flow is oriented by cost minimization and/or profit or utility maximization. Neoclassical economics is thus wedded to the hydrodynamics of flow fields. This approach may be viewed as a generalization of von Thunen's investigations. In fact, the specialization of land use, perhaps the most startling result of von Thunen's analysis, is also valid when demand is dispersed, i.e. for general spatially extended competitive markets. Main features: 1. The setting of the space economy is continuous 2-dimensional space. This makes it possible to appeal to geometric and geographical intuition, unlike the case of abstract indexing of locations in discrete models. 2. Structural stability analysis is used to characterize the qualitative features of the spatial organization of trade and production. 3.
 
The purpose of this monograph is to reintroduce the two-dimensional continuum as the natural spatial setting of economic activities and to exploit the idea for all its worth. Interaction between agents is viewed as flows of commodities or persons. Flows are generated by production and consumption activities representing sources and sinks of a flow field. The direction of flow is oriented by cost minimization and/or profit or utility maximization. Neoclassical economics is thus wedded to the hydrodynamics of flow fields. This approach may be viewed as a generalization of von Thunen's investigations. In fact, the specialization of land use, perhaps the most startling result of von Thunen's analysis, is also valid when demand is dispersed, i.e. for general spatially extended competitive markets. Main features: 1. The setting of the space economy is continuous 2-dimensional space. This makes it possible to appeal to geometric and geographical intuition, unlike the case of abstract indexing of locations in discrete models. 2. Structural stability analysis is used to characterize the qualitative features of the spatial organization of trade and production. 3.