Agglomeration and growth: The effects of commuting costs
AbstractWe present a model of industrial location and endogenous growth with congestion costs. According to the interplay between knowledge spillovers and commuting costs, we are able to obtain both a Krugman-type and a bell-shaped agglomeration outcome. In the first case, the economy experiences a permanent income inequality in the steady state and income divergence in the transitional dynamics. In the second case, we observe an enlargement of the industrial core of the economy with a strong catching up by the periphery. Welfare analysis shows that congestion creates (in the bell-shaped agglomeration case) a negative welfare effect on peripheral unskilled workers and it renders the agglomerated equilibrium Pareto inferior to dispersion. Copyright (c) 2009 the author(s). Journal compilation (c) 2009 RSAI.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Papers in Regional Science.
Volume (Year): 89 (2010)
Issue (Month): 1 (03)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=1056-8190
Other versions of this item:
- Antonio Accetturo, 2008. "Agglomeration and growth: the effects of commuting costs," Temi di discussione (Economic working papers) 688, Bank of Italy, Economic Research and International Relations Area.
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
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- Fujishima, Shota, 2013. "Growth, agglomeration, and urban congestion," Journal of Economic Dynamics and Control, Elsevier, vol. 37(6), pages 1168-1181.
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