Imagine a very large town, at the center of a fertile plain which is crossed by no navigable river or canal. Throughout the plain the soil is capable of cultivation and of the same fertility. Far from the town, the plain turns into uncultivated wilderness which cuts off all communication between this State and the outside world. There are no other towns on the plain. The central town must therefore supply the rural areas with all manufactured products and in return it will obtain all its provisions from the surrounding countryside. J. H. von Thünen (1826; 1842, p. 11)
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We are indebted to Heinz König, John Mellor, and Hans van Beek, and to three anonymous referees of the journal for helpful comments, and to Victoria Dalko for her able research assistance. Financial assistance from the Foerder Institute for Economic Research and the International Food Policy Research Institute is gratefully acknowledged. A version of the paper also appears as Working Paper No. 989 of the Foerder Institute and Discussion Paper No. A 269 of the University of Bonn.
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Nerlove, M.L., Sadka, E. Von Thünen's model of the dual economy. Zeitschr. f. Nationalökonomie 54, 97–123 (1991). https://doi.org/10.1007/BF01227080
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DOI: https://doi.org/10.1007/BF01227080