Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/89483
Authors: 
Bottazzi, Giulio
Dindo, Pietro
Year of Publication: 
2008
Series/Report no.: 
LEM Working Paper Series 2008/27
Abstract: 
In an economic geography model where both a negative pecuniary and a positive technological externality are present, we introduce an explicit dynamics of firms locational choice and we characterize its long run distribution. Our analysis shows that economic activities evenly distribute when the pecuniary externalities prevail, and agglomerate otherwise. Due to the stochastic nature of the dynamics, even when agglomeration occurs, it is only a metastable state. By giving time and firms heterogeneity a role, we are bringing the evolutionary approach inside the domain of economic geography.
Subjects: 
Evolutionary Economic Geography
Heterogeneity
Agglomeration
Technological externalities
Markov Chains
JEL: 
C62
F12
R12
Document Type: 
Working Paper

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