General Equilibrium in a Spatial Economy

Abstract

<p>This dissertation examines the theory of general economic equilibrium in a simple spatial context. Two fundamental issues are confronted. First, the problem of reconciling the technical apparatus of general equilibrium theory with a geographical setting is solved by reinterpreting the role of transportation in the economy. Second, the implications of the theory for the behaviour of transportation functions are formally investigated.</p> <p>The analysis demonstrate that, in the postulated spatial structure, the required behaviour of transportation relationships contradicts empirical evidence. This result is true for both consumption and production sectors, and hold for any spatial configuration of the economy which admits the same interpretation of transportation.</p>