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Local trade networks and spatially persistent unemployment

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  • Oomes, Nienke

Abstract

This paper studies the effect of local trade networks on the spatial distribution of employment in a Cooper and John (1988) type model with effective demand externalities. It is shown that, if labor can be hired in continuous quantities, then the long run spatial distribution of employment is uniform, and independent of any trade network topology. When labor has binary support, however, local trade networks are shown to generate spatial unemployment clusters which can persist indefinitely.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Dynamics and Control.

Volume (Year): 27 (2003)
Issue (Month): 11-12 (September)
Pages: 2115-2149

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Handle: RePEc:eee:dyncon:v:27:y:2003:i:11-12:p:2115-2149

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Cited by:
  1. Yannis M. Ioannides & Linda Datcher Loury, 2002. "Job Information Networks, Neighborhood Effects and Inequality," Discussion Papers Series, Department of Economics, Tufts University 0217, Department of Economics, Tufts University.
  2. Brock,W.A. & Durlauf,S.N., 2005. "Social interactions and macroeconomics," Working papers 5, Wisconsin Madison - Social Systems.
  3. Nienke Oomes & Christopher M. Meissner, 2008. "Why Do Countries Peg the Way They Peg?The Determinants of Anchor Currency Choice," IMF Working Papers 08/132, International Monetary Fund.

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