Spatial Development

Klaus Desmet and Esteban Rossi-Hansberg

No 15349, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We present a theory of spatial development. Manufacturing and services firms located in a continuous geographic area choose each period how much to innovate. Firms trade subject to transport costs and technology diffuses spatially across locations. The result is a spatial endogenous growth theory that can shed light on the link between the evolution of economic activity over time and space. We apply the model to study the evolution of the U.S. economy in the last few decades and find that the model can generate the reduction in the employment share in manufacturing, the increase in service productivity starting in the second part of the 1990s, the increase in the value and dispersion of land rents in the same period, as well as several other spatial and temporal patterns.

JEL-codes: E32 O11 O18 O33 R12 (search for similar items in EconPapers)
Date: 2009-09
New Economics Papers: this item is included in nep-geo, nep-mac and nep-ure
Note: EFG ITI PR
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published as “ Spatial Development ” (with Desmet ) April 2014, American Economic Review , 104:4, 1211 - 1243

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Related works:
Journal Article: Spatial Development (2014)
Working Paper: Spatial Development (2010)
Working Paper: Spatial development (2010)
Working Paper: Spatial Development (2009)
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