Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/53270
Authors: 
Kyriakopoulou, Efthymia
Xepapadeas, Anastasios
Year of Publication: 
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

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