Agglomeration and Knowledge Diffusion
According to New Growth Theory one can not rely on the convergence mechanisms inherent in traditional neoclassical constant returns to scale models. Convergence as well as divergence is possible, in general, depending on the assumptions about technology, factor mobility and ease of knowledge diffusion. The paper shows by a two-regions endogenous growth model under what conditions divergence, convergence or a stable centre-periphery structure emerge. The model allows for different degrees of knowledge diffusion as well as for different degrees of labor and capital mobility. The paper also evaluates dynamic market equilibria with respect to allocative efficiency. It is shown that the market solution tends to be under-agglomerated, except for parameter constellations generating particularly low agglomeration forces. If agglomeration forces are low enough, no concentration emerges, and this is also socially desirable. For higher agglomeration forces, however, concentration becomes desirable though the market may not bring it about or brings it about to an insufficient degree only.
|Date of creation:||2004|
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References listed on IDEAS
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- Baldwin, Richard E. & Forslid, Rikard, 2000.
"Trade liberalisation and endogenous growth: A q-theory approach,"
Journal of International Economics,
Elsevier, vol. 50(2), pages 497-517, April.
- Baldwin, Richard & Forslid, Rikard, 1996. "Trade Liberalization and Endogenous Growth: A q-Theory Approach," CEPR Discussion Papers 1397, C.E.P.R. Discussion Papers.
- Richard E. Baldwin & Rikard Forslid, 1996. "Trade Liberalization and Endogenous Growth: A q-Theory Approach," NBER Working Papers 5549, National Bureau of Economic Research, Inc.
- Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 577-598.
- Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1992. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," NBER Working Papers 3993, National Bureau of Economic Research, Inc.
- Jaffe, A.B. & Trajtenberg, M., 1992. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," Papers 14-92, Tel Aviv.
- Fujita,Masahisa & Thisse,Jacques-FranÃ§ois, 2013. "Economics of Agglomeration," Cambridge Books, Cambridge University Press, number 9781107001411, March.
- Fujita, Masahisa & Thisse, Jacques-Francois, 1996. "Economics of Agglomeration," Journal of the Japanese and International Economies, Elsevier, vol. 10(4), pages 339-378, December.
- Fujita,Masahisa & Thisse,Jacques-FranÃ§ois, 2013. "Economics of Agglomeration," Cambridge Books, Cambridge University Press, number 9780521171960, December.
- Fujita, M. & Thisse, J.-F., "undated". "Economics of agglomeration," CORE Discussion Papers RP 1250, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Fujita, Masahisa & Thisse, Jacques-François, 1996. "Economics of Agglomeration," CEPR Discussion Papers 1344, C.E.P.R. Discussion Papers.
- Martin, Philippe & Ottaviano, Gianmarco I P, 2001. "Growth and Agglomeration," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(4), pages 947-968, November.
- Philippe Martin & Gianmarco Ottaviano, 1996. "Growth and Agglomeration," Working Papers 1996-14, CEPII research center.
- Philippe Martin & Gianmarco Ottaviano, 2001. "Growth and Agglomeration," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00179826, HAL.
- Martin, Philippe & Ottaviano, Gianmarco, 1996. "Growth and Agglomeration," CEPR Discussion Papers 1529, C.E.P.R. Discussion Papers.
- Baldwin, Richard E & Forslid, Rikard, 2000. "The Core-Periphery Model and Endogenous Growth: Stabilizing and Destabilizing Integration," Economica, London School of Economics and Political Science, vol. 67(267), pages 307-324, August.
- Baldwin, Richard E., 2001. "Core-periphery model with forward-looking expectations," Regional Science and Urban Economics, Elsevier, vol. 31(1), pages 21-49, February.
- Baldwin, Richard & Forslid, Rikard, 1997. "The Core-Periphery Model and Endogenous Growth," CEPR Discussion Papers 1749, C.E.P.R. Discussion Papers. Full references (including those not matched with items on IDEAS)
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