Burkhard Rabenau

Abstract

Here differences in urban or regional growth rates are explined as a consequence of factor price differentials. Factors move between urban aret and nation in the direction of higher returns. This lowers return differentials below alevel that would have existed in the absence of such factor movements. Analytical m)dels along this line have been formulated by Hanson and Rabenau (1976), and Ratenau (1973, 1974). The model presented here extends this work.Section 2 of this paper describes an urban area which produces a single multi-purpose output with two factors. The growth of the two factors is described b) two differential equations. It is the sum of urban internal growth and growth dte to movements between urban area and nation. The analysis of the urban growth path is simplified by the assumption that the urban area is small relative to the na ion; hence factor returns in the nation are stationary and unaffected by the factor move-ments. Section 3 describes the growth path for the case of constant returns. In Sec-tions 4 and 5 agglomeration effects are considered. For ease of exposition the cases of agglomeration economies and diseconomies are examined separately in Section 4. Section 5 analyzes the probably common and most relevant case that an urban area exhibits agglomeration economies for small and diseconomies for large sizes. It should be considered the most realistic and interesting of all cases. Conclusions follow in Section 6.

Burkhard Rabenau, Department of City and Regional Planning, The Ohio State University, Columbus, Ohio, USA