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Cited by 260

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Agglomeration and Growth: The Effects of Commuting Costs

Open access
Accetturo, Antonio·2008·SSRN Electronic Journal

Abstract

We present a model of industrial location and endogenous growth with congestion costs. According to the interplay between knowledge spillovers and commuting costs, we are able to obtain both a Krugman-type and a bell-shaped agglomeration outcome. In the first case, the economy experiences a permanent income inequality in the steady state and income divergence in the transitional dynamics. In the second case, we observe an enlargement of the industrial core of the economy with a strong catching up by the periphery. Welfare analysis shows that congestion create (in the bell-shaped agglomeration case) a negative welfare effect on peripheral unskilled workers and renders the agglomerated equilibrium Pareto inferior to dispersion.

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Metadata

Authors
Accetturo, A.
Venue
SSRN Electronic Journal
Publisher
Elsevier BV
Published
2008
ISSN
1556-5068 (ISSN-L)
OpenAlex
W1961320983
Cited by
260
References
1
Type
posted content
Language
en
Open access
green

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