Tinbergen-Bos Metricised Systems: Some Further Results

Abstract

The paper describes a spatial economic equilibrium in which each market shows an equilibrium and the location of all producers is determined in an optimal way. Being a very general model, in order to solve it a number of hypotheses had to be introduced. We used the hypothesis of Tinbergen and Bos. The system is optimised in such a way that total transport costs are minimised. Many optimal solutions are shown for different numbers of firms per sector. It appears that the optimal location for a sector having a very limited number of firms, would be the centre of the region; if the number of firms increases, optimal locations will be found in a circle around the centre. The impact of economic variables—such as the propensity to consume-on the optimal location pattern of all firms, is also demonstrated.