Historical trends of agglomeration to the capital region and new economic geography

• NEG models can simulate agglomeration to the primate city for a few centuries.
• This paper characterizes the stable equilibrium distribution of economic activities.
• This characterization is for sufficiently small or large transport costs.
• This characterization is for any number of regions and any interregional distances.

This paper shows that a family of the Dixit–Stiglitz type of new economic geography models is capable of simulating the real-world tendency for agglomeration to the primate city. It is often observed that while regional populations were dispersed in early times, they have been increasingly concentrated into one capital region over recent years. The present paper thus characterizes the stable equilibrium distribution for any number of regions, any set of interregional distances, and any distribution of immobile demand for sufficiently small or large transport costs. It also demonstrates that multi-region new economic geography models are able to simulate the real-world population distribution trends witnessed over the past few centuries.