Abstract
Interaction of economic activities between different spatial scales (e.g., Country-Region-City) has never been examined in traditional location theory (e.g., New Economic Geography: NEG). In this paper, we develop the Core-Periphery model with hierarchical (i.e., multi-scale) spatial structure which introduces the interaction between inter-regional and intra-regional transportation costs explicitly, and analyze bifurcation phenomena of the equilibrium by the approach proposed by Akamatsu et al. 1), 2). Results of our analysis reveal that combinations of inter-regional and intra-regional transport costs can yield a wide variety of agglomeration (dispersion) patterns depending on the transportation parameter values. In particular, one of the most interesting transitions of agglomeration patterns is inter-regional re-dispersion caused by intra-regional competition. This findings suggest that traditional theory disregarding spatial scales should be reconsidered.
