Economic Geography and the Effect of Environmental Pollution on Agglomeration

Andreas Lange and Martin Quaas

The B.E. Journal of Economic Analysis & Policy, 2007, vol. 7, issue 1, 33

Abstract: We study how local environmental pollution affects spatial patterns of economic activities when workers can migrate. Based on a New Economic Geography model, we analytically characterize the stability conditions for three different types of equilibria: symmetric spreading, partial and full agglomeration. We show that the extent of agglomeration crucially depends on the damages caused by local pollution. We thereby provide a unified framework for discussing different relationships between the extent of agglomeration and trade freeness that have been found in the literature.

Keywords: economic geography; environmental economics; pollution; labor mobility; agglomeration (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (24)

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DOI: 10.2202/1935-1682.1724

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