Summary: An analytical model for the formation of economic clusters
Ludwig Chincarini a
, Neer Asherie b,
Department of Economics, Pomona College, 425 N. College Avenue #208, Claremont, CA 91711, United States
Department of Physics, Yeshiva University, Belfer Hall 1412, 2495 Amsterdam Avenue, New York, NY 10033-3312, United States
Available online 31 January 2008
A simple spatial economy derived from microeconomic foundations is presented to gain insight into the formation of economic
clusters. In this model, the formation of economic clusters is a consequence of the competition between economic forces that are
consistent with atomistic agents maximizing their utility. An analytic approach is used to obtain the evolution of economic clusters.
With this approach, the number of clusters which will grow can be predicted. These results are derived in the traditional one-
dimensional geometry and extended to the more realistic two-dimensional landscape.
© 2008 Elsevier B.V. All rights reserved.
JEL classification: R1; C6; F12
Keywords: Economic geography; Economic clusters; Agglomeration; Mathematical modelling; City formation
Since the Industrial Revolution when large scale urbanization began, there has been an investigation of the factors that
shape the economic landscape.1