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Knowledge exchange, matching, and agglomeration

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Author Info
Marcus Berliant
Robert R. Reed, III
Ping Wang

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Abstract

Despite wide recognition of their significant role in explaining sustained growth and economic development, uncompensated knowledge spillovers have not yet been fully modeled with a microeconomic foundation. The main purpose of this paper is to illustrate the exchange of knowledge as well as its consequences on agglomerative activity in a general-equilibrium search-theoretic framework. Agents, possessing differentiated types of knowledge, search for partners to exchange ideas and create new knowledge in order to improve production efficacy. When individuals’ types of knowledge are too diverse, a match is less likely to generate significant innovations. We demonstrate the extent of agglomeration has significant implications for the patterns of information flows in economies. Further, by simultaneously determining the patterns of knowledge exchange and the spatial agglomeration of an economy we identify additional channels for interaction between agglomerative activity and knowledge exchange. Finally, contrary to previous work in spatial agglomeration, our model suggests that agglomerative environments may be either under-specialized and under-populated or over-specialized and over-populated relative to the social optimum.

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Paper provided by Federal Reserve Bank of Minneapolis in its series Discussion Paper / Institute for Empirical Macroeconomics with number 135.

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Date of creation: 2000
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Handle: RePEc:fip:fedmem:135

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Keywords: Econometric models;

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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Marcus Berliant & Masahisa Fujita, 2004. "Knowledge Creation as a Square Dance on the Hilbert Cube," Game Theory and Information 0401004, EconWPA, revised 27 Jan 2004. [Downloadable!]
    Other versions:
  2. Shihe Fu, 2005. "Smart Cafe Cities: Testing Human Capital Externalities in the Boston Metropolitan Area," Working Papers 05-24, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
    Other versions:
  3. Neslihan Aydogan & Thomas P. Lyon, 2004. "Spatial Proximity and Complementarities in the Trading of Tacit Knowledge," Microeconomics 0404004, EconWPA. [Downloadable!]
    Other versions:
  4. Diego Puga, 2009. "The magnitude and causes of agglomeration economies," Working Papers 2009-09, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales. [Downloadable!]
  5. Gerald Carlino & Satyajit Chatterjee & Robert Hunt, 2005. "Matching and learning in cities: urban density and the rate of invention," Working Papers 04-16, Federal Reserve Bank of Philadelphia. [Downloadable!]
    Other versions:
  6. Bazhanov, Andrei & Hartwick, John, 2006. "Dispersed Interactions of Urban Residents," MPRA Paper 766, University Library of Munich, Germany. [Downloadable!]
  7. Gerald Carlino & Satyajit Chatterjee & Robert Hunt, 2006. "Urban density and the rate of invention," Working Papers 06-14, Federal Reserve Bank of Philadelphia. [Downloadable!]
    Other versions:
  8. Chung-Yi Tse, 2008. "Learning investment and industrial diversity in urban growth," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(2), pages 413-433, April. [Downloadable!] (restricted)
  9. John Hartwick & Andrei Bazhanov, 2007. "On Beckmann's Dispersed "Interaction City"," Working Papers 1170, Queen's University, Department of Economics. [Downloadable!]
  10. Berliant, Marcus & Fujita, Masahisa, 2009. "The dynamics of knowledge diversity and economic growth," MPRA Paper 16475, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  11. Robert M. Hunt, 2007. "Matching externalities and inventive productivity," Working Papers 07-7, Federal Reserve Bank of Philadelphia. [Downloadable!]
  12. Jan Kranich, 2008. "R&D and the agglomeration of industries," Working Paper Series in Economics 83, University of Lüneburg, Institute of Economics. [Downloadable!]
  13. Marcus Berliant & Ping Wang, 2004. "Dynamic Urban Models: Agglomeration and Growth," Urban/Regional 0404006, EconWPA. [Downloadable!]
    Other versions:
  14. Giles Duranton & Diego Puga, 2003. "Micro-Foundations of Urban Agglomeration Economies," NBER Working Papers 9931, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  15. Marcus Berliant & Ping Wang, 2005. "Urban Growth and Subcenter Formation: A Trolley Ride from the Staples Center to Disneyland and the Rose Bowl," Urban/Regional 0511012, EconWPA. [Downloadable!]
    Other versions:
  16. Charlot, Sylvie & Duranton, Gilles, 2003. "Communication Externalities in Cities," CEPR Discussion Papers 4048, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  17. Gerald Carlino & Robert Hunt, 2009. "What explains the quantity and quality of local inventive activity?," Working Papers 09-12, Federal Reserve Bank of Philadelphia. [Downloadable!]
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