A spatial network approach to urban configurations

We propose a spatial network approach to studying urban configurations by modelling explicitly knowledge transmission, aggregation and spillovers via links formed, as well as by allowing the population and the locality role (‘core’ versus ‘periphery’) in each location to be endogenously determined in equilibrium. We establish conditions for the commonly assumed monocentric configuration to arise as the unique and efficient equilibrium outcome. We also illustrate under what circumstances a spatial equilibrium may feature multicentric, urban-rural, or multiple (disconnected) urban areas and under what conditions each configuration is socially efficient. We further characterize the spatial equilibrium by performing various comparative statics.