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Governmental activity, integration, and agglomeration

  • Ingrid Ott
  • Susanne Soretz

This 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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File URL: https://www.ifw-members.ifw-kiel.de/publications/the-competitiveness-effects-of-the-eu-climate-policy/KAP-1464.pdf
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Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1465.

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Length: 33 pages
Date of creation: Nov 2008
Date of revision:
Handle: RePEc:kie:kieliw:1465
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  1. Edwards, John H. Y., 1990. "Congestion function specification and the "publicness" of local public goods," Journal of Urban Economics, Elsevier, vol. 27(1), pages 80-96, January.
  2. Joachim Wagner, 2006. "International Firm Activities and Innovation: Evidence from Knowledge Production Functions for German Firms," Papers on Entrepreneurship, Growth and Public Policy 2006-15, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  3. Martin, Philippe & Rogers, Carol Ann, 1994. "Industrial Location and Public Infrastructure," CEPR Discussion Papers 909, C.E.P.R. Discussion Papers.
  4. Sonja Peterson, 2006. "Efficient Abatement in Separated Carbon Markets: A Theoretical and Quantitative Analysis of the EU Emissions Trading Scheme," Kiel Working Papers 1271, Kiel Institute for the World Economy.
  5. Gramlich, Edward M, 1994. "Infrastructure Investment: A Review Essay," Journal of Economic Literature, American Economic Association, vol. 32(3), pages 1176-96, September.
  6. Eicher, Theo & Turnovsky, Stephen J, 2000. "Scale, Congestion and Growth," Economica, London School of Economics and Political Science, vol. 67(267), pages 325-46, August.
  7. Gerhard Glomm & B. Ravikumar, 1994. "Growth-Inequality Trade-Offs in a Model with Public Sector R&D," Canadian Journal of Economics, Canadian Economics Association, vol. 27(2), pages 484-93, May.
  8. Gernot Klepper & Sonja Peterson, 2004. "The EU Emissions Trading Scheme. Allowance Prices, Trade Flows, Competitiveness Effects," Working Papers 2004.49, Fondazione Eni Enrico Mattei.
  9. Klepper, Gernot & Peterson, Sonja, 2004. "The EU emissions trading scheme allowance prices, trade flows and competitiveness effects," Open Access Publications from Kiel Institute for the World Economy 3270, Kiel Institute for the World Economy (IfW).
  10. Luis A. Rivera-Batiz & Paul M. Romer, 1990. "Economic Integration and Endogenous Growth," NBER Working Papers 3528, National Bureau of Economic Research, Inc.
  11. Mills, Edwin S. & Nijkamp, Peter, 1987. "Advances in urban economics," Handbook of Regional and Urban Economics, in: E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 2, chapter 17, pages 703-714 Elsevier.
  12. Glomm, Gerhard & Ravikumar, B., 1994. "Public investment in infrastructure in a simple growth model," Journal of Economic Dynamics and Control, Elsevier, vol. 18(6), pages 1173-1187, November.
  13. Sonja Peterson & Gernot Klepper, 2007. "Distribution Matters � Taxes vs. Emissions Trading in Post Kyoto Climate Regimes," Kiel Working Papers 1380, Kiel Institute for the World Economy.
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