On the evolution of hierarchical urban systems

The rapid urbanization trend of the world economy implies an increasing importance of cities as basic units of national and international trade. Given that the cities within an economy constitute some form of hierarchical structure, we model the endogenous formation of a hierarchical urban system. To overcome the multiplicity of equilibria, we propose an evolutionary approach which combines a general equilibrium model with an adjustment dynamics. It is demonstrated that as the economy's population size increases gradually, the urban system self-organizes into a highly regular hierarchical system a la Christaller. (C) 1999 Elsevier Science B.V. All rights reserved. JEL classification: R11; F12; D5.