Spatial Development

Klaus Desmet and Esteban Rossi-Hansberg

American Economic Review, 2014, vol. 104, issue 4, 1211-43

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. We apply the model to study the evolution of the US economy in the last half-century and find that it can generate the reduction in the manufacturing employment share, the increased spatial concentration of services, the growth in service productivity starting in the mid-1990s, the rise in the dispersion of land rents in the same period, as well as several other spatial and temporal patterns.

JEL-codes: J21 L16 L60 L80 O33 R11 R32 (search for similar items in EconPapers)
Date: 2014
Note: DOI: 10.1257/aer.104.4.1211
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Citations: View citations in EconPapers (60)

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