Environmental Policy and the Collapse of the Monocentric City
AbstractWe explain the spatial concentration of economic activity, in a model of economic geography, when the cost of environmental policy - which is increasing in the concentration of pollution - acts as a centrifugal force, while positive knowledge spillovers and a site with natural cost advantage act as centripetal forces. We study the agglomeration eects caused by trade-os between centripetal and centrifugal forces which eventually determine the distribution of economic activity across space. The rational expectations market equilibrium with spatially myopic environmental policy results either in a monocentric or in a polycentric city with the major cluster at the natural advantage site. The regulatorÃƒÂ¢Ã¯Â¿Â½Ã¯Â¿Â½s optimum results in a bicentric city which suggests that when environmental policy is spatially optimal, the natural advantage sites do not act as attractors of economic activity.
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Bibliographic InfoPaper provided by Athens University of Economics and Business in its series DEOS Working Papers with number 1019.
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Agglomeration; Space; Environmental policy; Natural cost advantage; Knowledge spillovers; Monocentric-bicentric city;
Other versions of this item:
- Efthymia Kyriakopoulou & Anastasios Xepapadeas, . "Environmental Policy and the Collapse of the Monocentric City," DEOS Working Papers 1021, Athens University of Economics and Business.
- Efthymia Kyriakopoulou & Anastasios Xepapadeas, . "Environmental Policy and the Collapse of the Monocentric City," DEOS Working Papers 1020, Athens University of Economics and Business.
- R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Production Analysis, and Firm Location - - - Government Policy; Regulatory Policy
- Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
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