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Location Dynamics and Knowledge Agglomeration

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  • Orlando Gomes

Abstract

A simple economic activity location rule is considered. Under this rule, one regards that location decisions depend on the presence or the absence of agglomeration economies. Considering a three-location economy, the system that is built leads, under certain conditions, to a saddle-path equilibrium, relatively to which we verify that the most interesting dynamics are associated not with the eventual convergence to the steady state (the saddle-path), that occurs only under exceptional circumstances, but with the divergence process away from the steady state. To explain the dynamics of the agglomeration economies, a knowledge variable is assumed. Returning to a two location economy one is able to assess in graphical terms the relation between distribution of knowledge and location of economic activities.

Suggested Citation

  • Orlando Gomes, 2004. "Location Dynamics and Knowledge Agglomeration," Urban/Regional 0409012, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpur:0409012
    Note: Type of Document - pdf; pages: 15
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/urb/papers/0409/0409012.pdf
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    References listed on IDEAS

    as
    1. Danny Quah, 2002. "Spatial Agglomeration Dynamics," American Economic Review, American Economic Association, vol. 92(2), pages 247-252, May.
    2. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, May.
    3. Richard E. Baldwin & Philippe Martin, 1999. "Two Waves of Globalisation: Superficial Similarities, Fundamental Differences," NBER Working Papers 6904, National Bureau of Economic Research, Inc.
    4. Anthony Venables, 2001. "Geography and International Inequalities: The Impact of New Technologies," Journal of Industry, Competition and Trade, Springer, vol. 1(2), pages 135-159, June.
    5. Nicholas Crafts & Anthony Venables, 2003. "Globalization in History.A Geographical Perspective," NBER Chapters,in: Globalization in Historical Perspective, pages 323-370 National Bureau of Economic Research, Inc.
    6. Quah, Danny, 2000. "Internet cluster emergence," LSE Research Online Documents on Economics 2220, London School of Economics and Political Science, LSE Library.
    7. Robert E. Lucas, Jr., 2001. "Externalities and Cities," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 4(2), pages 245-274, April.
    8. Quah, Danny, 2000. "Internet cluster emergence," European Economic Review, Elsevier, vol. 44(4-6), pages 1032-1044, May.
    9. Robert E. Lucas & Esteban Rossi-Hansberg, 2002. "On the Internal Structure of Cities," Econometrica, Econometric Society, vol. 70(4), pages 1445-1476, July.
    10. Quah, Danny, 2002. "Spatial agglomeration dynamics," LSE Research Online Documents on Economics 2042, London School of Economics and Political Science, LSE Library.
    11. Danny Quah, 2000. "Internet Cluster Emergence," CEP Discussion Papers dp0441, Centre for Economic Performance, LSE.
    12. Paul Krugman & Anthony J. Venables, 1995. "The Seamless World: A Spatial Model of International Specialization," NBER Working Papers 5220, National Bureau of Economic Research, Inc.
    13. Danny Quah, 2002. "Spatial Agglomeration Dynamics," CEP Discussion Papers dp0521, Centre for Economic Performance, LSE.
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    More about this item

    Keywords

    location decisions; dynamic systems; knowledge; technology; agglomeration economies;

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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