Inspired by the behavior of slime mold cells, Paul Krugman developed a simple one-dimensional model in which moving firms self-organize into cities. In this paper I show that extending the model into two dimensions significantly improves its realism. Cities in the two-dimensional model are similar in several respects to real cities: they grow and decline, they cluster near rivers and coasts, and, given certain parameters, their distribution follows Zipf's law. A calibration exercise, however, suggests that observed levels of agglomeration must be due to factors beyond those included in the model.
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