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FEEM Working Papers, Fondazione Eni Enrico Mattei >
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http://hdl.handle.net/10419/53270
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| Title: | | Environmental policy, spatial spillovers and the emergence of economic agglomerations  |
| Authors: | | Kyriakopoulou, Efthymia Xepapadeas, Anastasios |
| Issue Date: | | 2009 |
| Series/Report no.: | | Nota di lavoro // Fondazione Eni Enrico Mattei: Sustainable development 70.2009 |
| Abstract: | | We explain the spatial concentration of economic activity, in a model of economic geography, when the cost of environmental policy - which is increasing in the concentration of emissions - and an immobile production factor act as centrifugal forces, while positive knowledge spillovers and iceberg transportation costs act as centripetal forces. We study the agglomeration effects caused by trade-offs between centripetal and centrifugal forces. The above effects govern firms' location decisions and as a result, they define the distribution of economic activity across space. We derive the rational expectations equilibrium and the social optimum, compare the outcomes and characterize the optimal spatial policies. |
| Subjects: | | Agglomeration Spatial Economics Environmental Policy Knowledge Spillovers Transportation Cost |
| JEL: | | R3 Q5 H2 |
| Document Type: | | Working Paper |
| Appears in Collections: | | FEEM Working Papers, Fondazione Eni Enrico Mattei
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