*The views expressed here are those of the author and do not necessarily represent the views of the Federal Reserve Bank of Philadelphia or the Federal Reserve System. ensely populated areas tend to be more productive. Of course, the cost of living and producing in these locations is higher because congestion raises the cost of scarce fixed resources such as land. But despite the higher prices,...

The increase in wage inequality since 1980 in the United States has been more pronounced in larger cities, even after accounting for di¤erences in the composition of the workforce across locations. Using Census of Population and Census of Manufacturers data aggregated to the local labor market level, this paper examines the importance of changes in the factor bias of agglomeration economies, ca...

Economies of agglomeration are central to the understanding of the emergence of industrial clustering. However, existing models that incorporate such agglomeration economies have been largely neglecting the vast amount of empirical evidence on inter-sectoral differences in the patterns of industrial concentration. In this paper, we propose a baseline model of firm location in presence of dynami...

a r t i c l e i n f o If localization economies are present, firms within denser industry concentrations should exhibit higher levels of performance than more isolated firms. Nevertheless, research in industrial organization that has fo-cused on the influences on firm survival has largely ignored the potential effects from agglomeration. Recent studies in urban and regional economics suggest th...

Firms and workers are much more productive in large and dense urban environments. There is substantial evidence of such agglomeration economies based on three aproaches. First, on a clustering of production beyond what can be explained by chance or comparative advantage. Second, on spatial patterns in wages and rents. Third, on systematic variations in productivity with the urban environment. H...

Firms and workers are much more productive in large and dense urban environments. There is substantial evidence of such agglomeration economies based on three aproaches. First, on a clustering of production beyond what can be explained by chance or comparative advantage. Second, on spatial patterns in wages and rents. Third, on systematic variations in productivity with the urban environment. H...

Agglomeration Economies, or production cost savings due to geographic clustering of firms and industries, can enhance the growth and development of firms, industries, regions and cities. We provide an overview of the theory and empirical literature of agglomeration, and highlight several applications from the cost function perspective. These applications include cost savings from density in the...

urbanization agglomeration that is named jacobs externalities, refers to the role of economic diversification in urban. localization agglomeration, marshal-arrow-romer (mar) externalities, is related to the concentration of firms activated in a special industry within a specified place. the purpose of this research is to explore the impact of different types of agglomeration economies on employ...

Most models of regional agglomeration are based on the NEG (New Economic Geography) model in which returns to scale are pecuniary. We investigate the implications for regional agglomeration of a "Marshallian" model in which returns to scale derive from technological externalities. Workers are assumed to have heterogeneous "home region" preferences. The model is designed to explain how "second n...

www.phil.frb.org Business Review Q4 2003 7 www.phil.frb.org employment in the U.S. is located in metropolitan areas, and these areas account for 24 percent of the total land area of the country. Why is employment so heavily concentrated in selected areas of the country? Economists think that spatial concentration of employment (or, more generally, economic activity) develops for two very differ...