Location Dynamics and Knowledge Agglomeration

Orlando Gomes

Urban/Regional from University Library of Munich, Germany

Abstract: A simple economic activity location rule is considered. Under this rule, one regards that location decisions depend on the presence or the absence of agglomeration economies. Considering a three-location economy, the system that is built leads, under certain conditions, to a saddle-path equilibrium, relatively to which we verify that the most interesting dynamics are associated not with the eventual convergence to the steady state (the saddle-path), that occurs only under exceptional circumstances, but with the divergence process away from the steady state. To explain the dynamics of the agglomeration economies, a knowledge variable is assumed. Returning to a two location economy one is able to assess in graphical terms the relation between distribution of knowledge and location of economic activities.

Keywords: location decisions; dynamic systems; knowledge; technology; agglomeration economies (search for similar items in EconPapers)
JEL-codes: O33 R11 R12 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2004-09-28
New Economics Papers: this item is included in nep-geo
Note: Type of Document - pdf; pages: 15
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpur:0409012

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