Mechanisms of endogenous allocation of firms and workers in urban area: from monocentric to polycentric city

The purpose of paper is to investigate how the interplay of trade, commuting and communication costs shapes economy at both inter-regional and intra-urban level. Specifically, we study how trade affects the internal structure of cities and how decentralizing the production and consumption of goods in secondary employment centers allows firms located in a large city to maintain their predominance. The feature of approach is using of two-dimensional city pattern instead of the “long narrow city” model.