Spatial Agglomeration Dynamics
Paper No' CEPDP0521:
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Keywords: cluster; continuous space, convergence, distribution dynamics, growth, knowledge, saddlepath dynamics, spatial spillovers, spatial inequality
JEL Classification: D30;O10;O41
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This Paper is published under the following series:
CEP Discussion Papers
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This paper develops a model of economic growth and activity locating endogenously on a 3-dimensional featureless global geography. The same economic forces influence simulataneously growth, convergence, and spatial agglomeration and clustering. Economic activity is not concentrated on discrete isolated points but instead a dynamically-fluctuating, smotth spatial distribution. Spatial inequality is a Cass-Koopmans saddlepath, and the global distribution of economic activity converges towards egalitarian growth. Equality is stable but spatial inequality is needed to attain it.