Adjustment Costs and Long Run Spatial Agglomerations

We introduce knowledge spillovers as an externality in the production function of competitive firms operating in a finite spatial domain under adjustment costs. Spillovers are spatial as productive knowledge flows more easily among firms located nearby. When knowledge spillovers are not internalized by firms spatial agglomerations may emerge endogenously in a competitive equilibrium, however, they do not emerge at the steady state of the social optimum.


Issue Date:
2013-07
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/156577
Total Pages:
17
JEL Codes:
D21; R3; C61
Series Statement:
ES
68.2013




 Record created 2017-04-01, last modified 2017-08-27

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