Key points are not available for this paper at this time.
Since The Isolated State by von Thünen, countless versions of the von Thünen model have appeared. It seems, however, that a fundamental question remains unanswered: Why should all manufacturing goods be produced in a single town? In this paper we develop a monopolistic competition model of an ‘isolated state’, and investigate the answer to this question. Since the answer to this question suggests when there will be more than one town in the isolated state, it is hoped the present model will lead to the development of a general equilibrium model of urban systems.
Fujita et al. (Tue,) studied this question.