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date: 21 January 2021

Abstract and Keywords

Economists and planners are often at loggerheads. Economists see the strengths of markets while planners see their weaknesses. This article aims to initiate a productive dialogue between economists and planners. It introduces competitive general equilibrium theory, looking at the new urban economics, which is essentially competitive general equilibrium theory applied to the city. It gives a brief intellectual history of the new urban economics and this is followed by simplified presentations of the von Thünen model of agricultural land use and land rent and of the monocentric city model, which is the core of the new urban economics, and concludes with a discussion of economists' criticisms of the monocentric city model. Furthermore, it presents the economic theory of market failure, and the reviews the virtues of markets. Under this umbrella, the article finally draws upon various strands as to what planners need to know about new urban economics.

Keywords: economists, planners, general equilibrium theory, new urban economics, von Thünen model, monocentric city model

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