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...

The monocentric city ultimately becomes inefficient as urban growth continues because of increasing congestion close to the CBD. Although the exhaustion of CBD agglomeration economies is another major reason for the breakdown of monocentricity, these congestion costs are sufficient grounds alone for the emergence of the policentric metropolitan region. Theoretical models of the policentric city...

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...

This paper examines the agglomeration benefits of a transportation improvement in a city by modeling the microstructure of urban agglomeration based on monopolistic competition of differentiated intermediate products. Properly extended to include variety distortion in addition to price distortion, Harberger’s measure of excess burden yields the agglomeration benefits. The agglomeration benefits...