Spatial Development

Klaus Desmet and Esteban Rossi-Hansberg

No 7479, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We present a theory of spatial development. A continuum of locations in a geographic area choose each period how much to innovate (if at all) in manufacturing and services. Locations can trade subject to transport costs and technology diffuses spatially across locations. The result is an 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 in the second part of the 1990s, the increase in land rents in the same period, as well as several other spatial and temporal patterns.

Keywords: Dynamic spatial models; Growth; Innovation; Land rent evolution; Structural transformation; Technology diffusion; Trade (search for similar items in EconPapers)
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
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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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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