Growth and Land Use with Agriculture and Industry
DOI:
https://doi.org/10.6000/1929-7092.2014.03.21Keywords:
Urban dynamics, capital accumulation, land rent, residential distribution, Solow’s growth model, Alonso’s urban model, von-Thünen’s agricultural modelAbstract
This paper develops an economic growth model with economic structure and geography. The economy consists of one agricultural and one industrial sector and economic geography consists of urban and rural areas. The model synthesizes the main ideas in the Solow growth, the Alonso urban, and the von-Thünen's agricultural models in a compact framework. We simulate the model. We demonstrate that the economic geography has a unique equilibrium point with the specified parameter values. We examine changes in the preference, productivity, urban and regional amenities, transportation conditions, the population, and land endowment upon the long-term economic growth, structure, and geography.References
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http://dx.doi.org/10.1016/S0573-8555(04)66015-9
Abel, A.B. and Bernanke, B.S. 1998. Macroeconomics, 3rd edition. New York: Addison-Wesley.
Alonso, W. 1964. Location and Land Use. MA., Cambridge: Harvard University Press.
http://dx.doi.org/10.4159/harvard.9780674730854
Anas, A. 1990. “Taste Heterogeneity and Urban Spatial Structure: The Logit Model and Monocentric Theory Reconciled.” Journal of Urban Economics 28: 318-35.
http://dx.doi.org/10.1016/0094-1190(90)90031-H
Arnott, R.J. 1980. “A Simple Urban Growth Model with Durable Housing.” Regional Science and Urban Economics 10: 53-76.
http://dx.doi.org/10.1016/0166-0462(80)90048-4
Baldwin, R.E. and Martin, P. 2004. Agglomeration and Regional Growth. in Handbook of Regional and Urban Economics, Vol. 4, edited by J.V. Hendersson and J.F. Thisse. Amsterdam: Elsevier.
Becker, R.A. 1992. Cooperative Capital Accumulation Games and the Core, in Economic Theory and International Trade: Essays in Memoriam, J. Trout Rader, edited by W. Neuefeind, and R.G. Riezman. Berlin: Springer-Verlag.
http://dx.doi.org/10.1007/978-3-642-77671-7_1
Beckmann, M.J. 1957. On the Distribution of Rent and Residential Density in Cities. Paper presented at the inter-Departmental Seminar on Mathematical Applications in the Social Sciences, Yale University.
Beckmann, M.J. 1969. “On the Distribution of Urban Rent and Residential Density.” Journal of Economic Theory 1: 60-7.
http://dx.doi.org/10.1016/0022-0531(69)90012-X
Beckmann, M.J. and Papageorgiou, Y.Y. 1989. “Heterogeneous Tastes and Residential Location.” Journal of Regional Science 29, 317-23.
http://dx.doi.org/10.1111/j.1467-9787.1989.tb01381.x
Berliant, M., Peng, S.K. and Wang, P. 2002. “Production Externalities and Urban Configuration.” Journal of Economic Theory 104, 275-303.
http://dx.doi.org/10.1006/jeth.2001.2847
Blaug, M. 1985. Economic Theory in Retrospect, fourth edition. Cambridge: Cambridge University Press.
Brueckner, J. K. and Fansler, D. A. 1983. The Economics of Urban Sprawl: Theory and Evidence on the Spatial Sizes of Cities. Review of Economics and Statistics 65: 79-482.
http://dx.doi.org/10.2307/1924193
Burmeister, E. and Dobell, A.R. 1970. Mathematical Theories of Economic Growth. London: Collier Macmillan Publishers.
Capello, R. and Nijkamp, P. 2004, edited. Urban Dynamics and Growth: Advances in Urban Economics. Amsterdam: Elsevier.
Carrión-Flores, C. and Irwin, E.G. 2004. “Determinants of Residential Land-Use Conversion and Sprawl at the Rural-Urban Fringe.” American Journal of Agricultural Economics 86: 889-904.
http://dx.doi.org/10.1111/j.0002-9092.2004.00641.x
De Palma, A., Kilani, M. and Lindsey, R. 2005. “Congestion Pricing on a Road Network: A Study Using the Dynamic Equilibrium Simulator METROPOLIS.” Transportation Research A 39: 588-611.
http://dx.doi.org/10.1016/j.tra.2005.02.018
Forslid, R. and Ottaviano, G.I.P. 2003. “An Analytically Solvable Core-Periphery Model.” Journal of Economic Geography 3: 229-40.
http://dx.doi.org/10.1093/jeg/3.3.229
Frederick, S., Loewenstein, G. and O’Donoghue, T. 2002. “Time Discontinuing and Time Preference: A Critical Review.” Journal of Economic Literature 40: 351-401.
http://dx.doi.org/10.1257/jel.40.2.351
Fujita, M. 1999. Urban Economic Theory – Land Use and City Size. Cambridge: Cambridge University Press.
Fujita, M. and Thisse, J.F. 2002. Economics of Agglomeration: Cities, Industrial Location, and Regional Growth. Cambridge: Cambridge University Press.
http://dx.doi.org/10.1017/CBO9780511805660
Glaeser, E.L., Kolko, J., and Saiz, A. 2001. “Consumer City.” Journal of Economic Geography 1: 27-50.
http://dx.doi.org/10.1093/jeg/1.1.27
Henderson, J.V. 1974. “The Sizes and Types of Cities.” American Economic Review 64: 640-56.
Henderson, J.V. 1985. Economic Theories and Cities. New York: Academic Press.
Henderson, J.V. and Thisse, J.F. eds. 2004. Handbook of Regional and Urban Economics. Amsterdam: Elsevier.
Imai, H. 1982. “CBD Hypothesis and Economies of Agglomeration.” Journal of Economic Theory 28: 275-99.
http://dx.doi.org/10.1016/0022-0531(82)90062-X
Isard, W. 1956. Location and Space Economy. MA., Cambridge: MIT Press.
Krugman, P. 1991. “Increasing Returns and Economic Geography.” Journal of Political Economy 99: 483-499.
http://dx.doi.org/10.1086/261763
Krugman, P. 1998. “Space: The Final Frontier.” Journal of Economic Perspectives 12: 161-74.
http://dx.doi.org/10.1257/jep.12.2.161
Lucas, R.E. 1988. “On the Mechanics of Economic Development.” Journal of Monetary Economics 22: 3-42.
http://dx.doi.org/10.1016/0304-3932(88)90168-7
Lucas, R.E. and Rossi-Hansberg, E. 2002. “On the Internal Structure of Cities.” Econometrica 70: 1445-76.
http://dx.doi.org/10.1111/1468-0262.00338
Mohring, H. 1961. “Land Values and the Measurement of Highway Benefits.” Journal of Political Economy 69: 236-249.
http://dx.doi.org/10.1086/258466
Mundlak, Y. 2000. Agriculture and Economic Growth: Theory and Measurement. Mass., Cambridge: Harvard University Press.
Muth, R.F. 1961. “The Spatial Structure of the Housing Market.” Papers and Proceedings of the Regional Science Association 7: 207-220.
Papageorgiou, Y.Y. and Pines, D., eds. 1999. An Essay on Urban Economic Theory. Boston: Kluwer Academic Publishers.
http://dx.doi.org/10.1007/978-1-4615-4947-5
Rader, T. 1981. “Utility over Time: The Homothetic Case.” Journal of Economic Theory 25: 219-36.
http://dx.doi.org/10.1016/0022-0531(81)90003-X
Ready, R.C. and Abdalla, C.W. 2005. “The Amenity and Disamenity Impacts of Agriculture: Estimates
Richardson, B.V., 1973. Regional Growth Theory. New York: John Wiley.
Rietveld, P., Button, K. and Nijkamp, P., eds. 2003. Urban Transport. Cheltenham: Edward Elgar.
Robert-Nicound, F. 2004. “The Structure of Simple ‘New Economic Geography’ Models (or, On Identical Twins).” Journal of Economic Geography 5: 201-34.
http://dx.doi.org/10.1093/jnlecg/lbh037
Samuelson, P.A. 1937. “A Note on Measurement of Utility.” Review of Economic Studies 4: 155-61.
http://dx.doi.org/10.2307/2967612
Solow, R. 1956. “A Contribution to the Theory of Growth.” Quarterly Journal of Economics 70: 65-94.
http://dx.doi.org/10.2307/1884513
Solow, R.M. 1973. “On Equilibrium Models of Urban Location.” in Essays in Modern Economics, edited by M. Parkin. London: Longman.
Steigum, E.Jr. 1984. “Intersectoral Transfer of Labour in a Small Open Economy.” European Economic Review 24: 225-37.
http://dx.doi.org/10.1016/0014-2921(84)90110-7
Swan, T.W. 1956. “Economic Growth and Capital Accumulation.” Economic Record 32: 334-61.
http://dx.doi.org/10.1111/j.1475-4932.1956.tb00434.x
Tabuchi, T. and Thisse, J.F. 2002. “Taste Heterogeneity, Labor Mobility and Economic Geography.” Journal of Development Economics 69: 155-77.
http://dx.doi.org/10.1016/S0304-3878(02)00057-3
Train, K. and McFadden, D. 1978. “The Goods/Leisure Tradeoff and Disaggregate Work Trip Mode Choice Models.” Transportation Research 12: 349-53.
http://dx.doi.org/10.1016/0041-1647(78)90011-4
Upton, C. 1981. “An Equilibrium Model of City Sizes.” Journal of Urban Economics 10: 15-36.
http://dx.doi.org/10.1016/0094-1190(81)90020-6
von Thünen, J.H. 1826. Der Isolierte Staat in Beziehung auf Landwirtschaft und Nationalekonomie. Hamburg.
Wheaton, W.C. 2004. “Commuting, Congestion, and Employment Dispersal in Cities with Mixed Land Use.” Journal of Urban Economics 55: 417-438.
http://dx.doi.org/10.1016/j.jue.2003.12.004
Warner, J.T. and Pleeter, S. 2001. “The Personal Discount Rate: Evidence from Military Downsizing Programs.” American Economic Review 91: 33-53.
http://dx.doi.org/10.1257/aer.91.1.33
Wigno, L., Jr. 1961. Transportation and Urban Land. Washington, DC.: Resources for the Future.
Zhang, W.B. 1994. “Capital, Population and Urban Patterns.” Regional Science and Urban Economics 24: 273-86.
http://dx.doi.org/10.1016/0166-0462(93)02037-4
Zhang, W.B. 2005. Economic Growth Theory. Hampshire: Ashgate.
Zhang, W.B. 2007. “Economic Geography and Transportation Conditions with Endogenous Time Distribution amongst Work, Travel, and Leisure.” Journal of Transport Geography 15: 476-93.
http://dx.doi.org/10.1016/j.jtrangeo.2007.01.001
Zhang, W.B. 2008. International Trade Theory: Capital, Knowledge, Economic Structure, Money and Prices over Time and Space. Berlin: Springer.
http://dx.doi.org/10.1016/S0573-8555(04)66015-9
Abel, A.B. and Bernanke, B.S. 1998. Macroeconomics, 3rd edition. New York: Addison-Wesley.
Alonso, W. 1964. Location and Land Use. MA., Cambridge: Harvard University Press.
http://dx.doi.org/10.4159/harvard.9780674730854
Anas, A. 1990. “Taste Heterogeneity and Urban Spatial Structure: The Logit Model and Monocentric Theory Reconciled.” Journal of Urban Economics 28: 318-35.
http://dx.doi.org/10.1016/0094-1190(90)90031-H
Arnott, R.J. 1980. “A Simple Urban Growth Model with Durable Housing.” Regional Science and Urban Economics 10: 53-76.
http://dx.doi.org/10.1016/0166-0462(80)90048-4
Baldwin, R.E. and Martin, P. 2004. Agglomeration and Regional Growth. in Handbook of Regional and Urban Economics, Vol. 4, edited by J.V. Hendersson and J.F. Thisse. Amsterdam: Elsevier.
Becker, R.A. 1992. Cooperative Capital Accumulation Games and the Core, in Economic Theory and International Trade: Essays in Memoriam, J. Trout Rader, edited by W. Neuefeind, and R.G. Riezman. Berlin: Springer-Verlag.
http://dx.doi.org/10.1007/978-3-642-77671-7_1
Beckmann, M.J. 1957. On the Distribution of Rent and Residential Density in Cities. Paper presented at the inter-Departmental Seminar on Mathematical Applications in the Social Sciences, Yale University.
Beckmann, M.J. 1969. “On the Distribution of Urban Rent and Residential Density.” Journal of Economic Theory 1: 60-7.
http://dx.doi.org/10.1016/0022-0531(69)90012-X
Beckmann, M.J. and Papageorgiou, Y.Y. 1989. “Heterogeneous Tastes and Residential Location.” Journal of Regional Science 29, 317-23.
http://dx.doi.org/10.1111/j.1467-9787.1989.tb01381.x
Berliant, M., Peng, S.K. and Wang, P. 2002. “Production Externalities and Urban Configuration.” Journal of Economic Theory 104, 275-303.
http://dx.doi.org/10.1006/jeth.2001.2847
Blaug, M. 1985. Economic Theory in Retrospect, fourth edition. Cambridge: Cambridge University Press.
Brueckner, J. K. and Fansler, D. A. 1983. The Economics of Urban Sprawl: Theory and Evidence on the Spatial Sizes of Cities. Review of Economics and Statistics 65: 79-482.
http://dx.doi.org/10.2307/1924193
Burmeister, E. and Dobell, A.R. 1970. Mathematical Theories of Economic Growth. London: Collier Macmillan Publishers.
Capello, R. and Nijkamp, P. 2004, edited. Urban Dynamics and Growth: Advances in Urban Economics. Amsterdam: Elsevier.
Carrión-Flores, C. and Irwin, E.G. 2004. “Determinants of Residential Land-Use Conversion and Sprawl at the Rural-Urban Fringe.” American Journal of Agricultural Economics 86: 889-904.
http://dx.doi.org/10.1111/j.0002-9092.2004.00641.x
De Palma, A., Kilani, M. and Lindsey, R. 2005. “Congestion Pricing on a Road Network: A Study Using the Dynamic Equilibrium Simulator METROPOLIS.” Transportation Research A 39: 588-611.
http://dx.doi.org/10.1016/j.tra.2005.02.018
Forslid, R. and Ottaviano, G.I.P. 2003. “An Analytically Solvable Core-Periphery Model.” Journal of Economic Geography 3: 229-40.
http://dx.doi.org/10.1093/jeg/3.3.229
Frederick, S., Loewenstein, G. and O’Donoghue, T. 2002. “Time Discontinuing and Time Preference: A Critical Review.” Journal of Economic Literature 40: 351-401.
http://dx.doi.org/10.1257/jel.40.2.351
Fujita, M. 1999. Urban Economic Theory – Land Use and City Size. Cambridge: Cambridge University Press.
Fujita, M. and Thisse, J.F. 2002. Economics of Agglomeration: Cities, Industrial Location, and Regional Growth. Cambridge: Cambridge University Press.
http://dx.doi.org/10.1017/CBO9780511805660
Glaeser, E.L., Kolko, J., and Saiz, A. 2001. “Consumer City.” Journal of Economic Geography 1: 27-50.
http://dx.doi.org/10.1093/jeg/1.1.27
Henderson, J.V. 1974. “The Sizes and Types of Cities.” American Economic Review 64: 640-56.
Henderson, J.V. 1985. Economic Theories and Cities. New York: Academic Press.
Henderson, J.V. and Thisse, J.F. eds. 2004. Handbook of Regional and Urban Economics. Amsterdam: Elsevier.
Imai, H. 1982. “CBD Hypothesis and Economies of Agglomeration.” Journal of Economic Theory 28: 275-99.
http://dx.doi.org/10.1016/0022-0531(82)90062-X
Isard, W. 1956. Location and Space Economy. MA., Cambridge: MIT Press.
Krugman, P. 1991. “Increasing Returns and Economic Geography.” Journal of Political Economy 99: 483-499.
http://dx.doi.org/10.1086/261763
Krugman, P. 1998. “Space: The Final Frontier.” Journal of Economic Perspectives 12: 161-74.
http://dx.doi.org/10.1257/jep.12.2.161
Lucas, R.E. 1988. “On the Mechanics of Economic Development.” Journal of Monetary Economics 22: 3-42.
http://dx.doi.org/10.1016/0304-3932(88)90168-7
Lucas, R.E. and Rossi-Hansberg, E. 2002. “On the Internal Structure of Cities.” Econometrica 70: 1445-76.
http://dx.doi.org/10.1111/1468-0262.00338
Mohring, H. 1961. “Land Values and the Measurement of Highway Benefits.” Journal of Political Economy 69: 236-249.
http://dx.doi.org/10.1086/258466
Mundlak, Y. 2000. Agriculture and Economic Growth: Theory and Measurement. Mass., Cambridge: Harvard University Press.
Muth, R.F. 1961. “The Spatial Structure of the Housing Market.” Papers and Proceedings of the Regional Science Association 7: 207-220.
Papageorgiou, Y.Y. and Pines, D., eds. 1999. An Essay on Urban Economic Theory. Boston: Kluwer Academic Publishers.
http://dx.doi.org/10.1007/978-1-4615-4947-5
Rader, T. 1981. “Utility over Time: The Homothetic Case.” Journal of Economic Theory 25: 219-36.
http://dx.doi.org/10.1016/0022-0531(81)90003-X
Ready, R.C. and Abdalla, C.W. 2005. “The Amenity and Disamenity Impacts of Agriculture: Estimates
Richardson, B.V., 1973. Regional Growth Theory. New York: John Wiley.
Rietveld, P., Button, K. and Nijkamp, P., eds. 2003. Urban Transport. Cheltenham: Edward Elgar.
Robert-Nicound, F. 2004. “The Structure of Simple ‘New Economic Geography’ Models (or, On Identical Twins).” Journal of Economic Geography 5: 201-34.
http://dx.doi.org/10.1093/jnlecg/lbh037
Samuelson, P.A. 1937. “A Note on Measurement of Utility.” Review of Economic Studies 4: 155-61.
http://dx.doi.org/10.2307/2967612
Solow, R. 1956. “A Contribution to the Theory of Growth.” Quarterly Journal of Economics 70: 65-94.
http://dx.doi.org/10.2307/1884513
Solow, R.M. 1973. “On Equilibrium Models of Urban Location.” in Essays in Modern Economics, edited by M. Parkin. London: Longman.
Steigum, E.Jr. 1984. “Intersectoral Transfer of Labour in a Small Open Economy.” European Economic Review 24: 225-37.
http://dx.doi.org/10.1016/0014-2921(84)90110-7
Swan, T.W. 1956. “Economic Growth and Capital Accumulation.” Economic Record 32: 334-61.
http://dx.doi.org/10.1111/j.1475-4932.1956.tb00434.x
Tabuchi, T. and Thisse, J.F. 2002. “Taste Heterogeneity, Labor Mobility and Economic Geography.” Journal of Development Economics 69: 155-77.
http://dx.doi.org/10.1016/S0304-3878(02)00057-3
Train, K. and McFadden, D. 1978. “The Goods/Leisure Tradeoff and Disaggregate Work Trip Mode Choice Models.” Transportation Research 12: 349-53.
http://dx.doi.org/10.1016/0041-1647(78)90011-4
Upton, C. 1981. “An Equilibrium Model of City Sizes.” Journal of Urban Economics 10: 15-36.
http://dx.doi.org/10.1016/0094-1190(81)90020-6
von Thünen, J.H. 1826. Der Isolierte Staat in Beziehung auf Landwirtschaft und Nationalekonomie. Hamburg.
Wheaton, W.C. 2004. “Commuting, Congestion, and Employment Dispersal in Cities with Mixed Land Use.” Journal of Urban Economics 55: 417-438.
http://dx.doi.org/10.1016/j.jue.2003.12.004
Warner, J.T. and Pleeter, S. 2001. “The Personal Discount Rate: Evidence from Military Downsizing Programs.” American Economic Review 91: 33-53.
http://dx.doi.org/10.1257/aer.91.1.33
Wigno, L., Jr. 1961. Transportation and Urban Land. Washington, DC.: Resources for the Future.
Zhang, W.B. 1994. “Capital, Population and Urban Patterns.” Regional Science and Urban Economics 24: 273-86.
http://dx.doi.org/10.1016/0166-0462(93)02037-4
Zhang, W.B. 2005. Economic Growth Theory. Hampshire: Ashgate.
Zhang, W.B. 2007. “Economic Geography and Transportation Conditions with Endogenous Time Distribution amongst Work, Travel, and Leisure.” Journal of Transport Geography 15: 476-93.
http://dx.doi.org/10.1016/j.jtrangeo.2007.01.001
Zhang, W.B. 2008. International Trade Theory: Capital, Knowledge, Economic Structure, Money and Prices over Time and Space. Berlin: Springer.
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2014-08-11
How to Cite
Zhang, W.-B. (2014). Growth and Land Use with Agriculture and Industry. Journal of Reviews on Global Economics, 3, 271–292. https://doi.org/10.6000/1929-7092.2014.03.21
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