Spatial Economics for Building Back Better: The Japanese Experience

by Masahisa Fujita, Nobuaki Hamaguchi, Yoshihiro Kameyama

The central theme of this book is national land and infrastructure design in the age of the declining population and the recovery from the Great East Japan Earthquake in the affected regions in Japan. Based on the theory of spatial economics and evidence from Japanese history, the authors show that the growing economy with a population increase develops into a multi-cored and complex structure. In the population decline phase, however, such construction will be destabilized because of agglomeration economies in the central core. Then, a catastrophic shock that strikes may provoke the decline of the lower-rank-size provincial cities and their eventual disappearance if they compete  only in lower prices of staple products. Not only is the practice bad for the residents; it also leads to lower national welfare resulting from the loss of diversity and overcrowded big cities. The authors argue that small local towns can recover and will be sustained if they will endeavor in innovative production by making good use of local natural resources and social capital. Under the ongoing declining population in Japan, an undesirable concentration in Tokyo will proceed further with increasing social cost and risk. The recent novel coronavirus pandemic has highlighted that concern.

580 pages, Kindle Edition

Published October 17, 2021

About the author

Masahisa Fujita is a Professor at Konan University, an Adjunct Professor at the Institute of Economic Research, Kyoto University, and the former President and Chief Research Officer at the Research Institute of Economy, Trade and Industry. His research expertise covers urban economics, regional economics, and spatial economics. He is recognized as one of the pioneers of the study of new economic geography. Prior to his current positions, he was formerly an Assistant Professor at the Department of Transportational Engineering, Kyoto University (1973-1976); an Assistant Professor, Associate Professor, and Professor at the Department of Regional Science and Department of Economics, University of Pennsylvania (1976-1994); a Professor at the Institute of Economic Research, Kyoto University (1995-2007); and President of the Institute of Developing Economies, Japan External Trade Organization (JETRO) (2003-2007). He earned his Ph.D. in Regional Science from the University of Pennsylvania in 1972. He is a member of the Japan Academy, Japanese Economic Association, Applied Regional Science Conference, Japan Regional Science, Regional Science Association International, and American Economic Association. His publications include Economics of Agglomeration: Cities, Industrial Location, and Regional Growth, Cambridge University Press, 2013 (with J.-F. Thisse); The Spatial Economy: Cities, Regions, and International Trade , MIT Press, 1999 (with P. Krugman and A. J. Venables); and Urban Economic Theory, Cambridge University Press, 1989.