Economic Geography

Cross-Domain Bridges

Bridge Optimal transport theory (Kantorovich) and economic geography (Krugman core-periphery model) share the same mathematical structure ΓÇö spatial allocation of economic activity follows transport cost minimization, with bifurcations determining whether manufacturing concentrates or disperses.

Fields: Mathematics, Economics, Social Science, Economic Geography, Optimal Transport

Kantorovich's optimal transport problem (minimize transport cost to move goods from producers to consumers) and Krugman's (1991) new economic geography share deep mathematical structure. Krugman's cor...

Open Unknowns (1)

Unknown Can the gravity model of trade be structurally estimated with sufficient accuracy to calculate the welfare gains from trade agreements and optimal tariff structures, and what is the correct functional form for trade costs at different distance scales? u-gravity-model-trade-structural-estimation-welfare

Active Hypotheses

Hypothesis The spatial structure of cities (commuting patterns, residential sorting, land price gradients) is well-approximated by the solution to an optimal transport problem ΓÇö workers minimize expected commuting cost subject to housing supply constraints ΓÇö making Wasserstein distance between job and residence distributions a predictive measure of urban welfare and inequality. medium

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Generated 2026-05-10 · USDR Dashboard