The world is replete with spatial frictions. Shipping goods across cities entails trade frictions. Commuting within cities causes urban frictions. How important are these frictions in shaping the spatial economy? We develop and quantify a multi-city general equilibrium model to address this question at three different levels: Do spatial frictions matter for the city-size distribution? Do they affect individual city sizes? Do they contribute to the productivity advantage of large cities and the toughness of competition in cities? The short answers are: no; yes; and it depends. ? 2016 Elsevier Inc.

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1 January 2017

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Journal of Urban Economics 97, pp.40-70, 2017

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DOI: 10.1016/j.jue.2016.11.003

http://hdl.handle.net/10419/102561

This Journal article is published under the centre's Trade programme.