STABLE ECONOMIC AGGLOMERATION PATTERNS IN TWO DIMENSIONS: BEYOND THE SCOPE OF CENTRAL PLACE THEORY

Abstract

ABSTRACT This paper elucidates which agglomeration patterns exist in two‐dimensional economic space and how such patterns appear stably. Hexagonal lattices, that with and that without a boundary, are advanced, respectively, as practical and theoretical spatial platforms of economic activities. Agglomeration patterns on these lattices include hexagons in central place theory, but also encompass megalopolis and racetrack‐shaped decentralization. As the transport cost decreases, stable economic agglomeration undergoes the formation of the smallest hexagon and transition to patterns with larger market areas, often undergoing downtown decay but finally leading to a megalopolis. Formulas for break points are provided in an economic geography model.