Governmental activity, integration, and agglomeration
AbstractThis paper analyzes, within a regional growth model, the impact of productive governmental policy and integration on the spatial distribution of economic activity. Integration is understood as enhancing territorial cooperation between the regions, and it describes the extent to which one region may benefit from the other region's public input, e.g. the extent to which regional road networks are connected. Both integration and the characteristics of the public input crucially affect whether agglomeration arises and if so to which extent economic activity is concentrated: As a consequence of enhanced integration, agglomeration is less likely to arise and concentration will be lower. Relative congestion reinforces agglomeration, thereby increasing equilibrium concentration. Due to the congestion externalities, the market outcome ends up in suboptimally high concentration. --
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Bibliographic InfoPaper provided by Hamburg Institute of International Economics (HWWI) in its series HWWI Research Papers with number 1-10.
Date of creation: 2007
Date of revision:
public inputs; agglomeration; integration;
Other versions of this item:
- Ingrid Ott & Susanne Soretz, 2008. "Governmental activity, integration, and agglomeration," Kiel Working Papers 1465, Kiel Institute for the World Economy.
- Ingrid Ott & Susanne Soretz, 2006. "Governmental activity, integration, and agglomeration," Working Paper Series in Economics 57, University of Lüneburg, Institute of Economics.
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
- R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis
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