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Knowledge exchange, matching, and agglomeration

Marcus Berliant (), Robert Reed () and Ping Wang ()

No 135, Discussion Paper / Institute for Empirical Macroeconomics from Federal Reserve Bank of Minneapolis

Abstract: Despite wide recognition of their significant role in explaining sustained growth and economic development, uncompensated knowledge spillovers have not yet been fully modeled with a microeconomic foundation. The main purpose of this paper is to illustrate the exchange of knowledge as well as its consequences on agglomerative activity in a general-equilibrium search-theoretic framework. Agents, possessing differentiated types of knowledge, search for partners to exchange ideas and create new knowledge in order to improve production efficacy. When individuals’ types of knowledge are too diverse, a match is less likely to generate significant innovations. We demonstrate the extent of agglomeration has significant implications for the patterns of information flows in economies. Further, by simultaneously determining the patterns of knowledge exchange and the spatial agglomeration of an economy we identify additional channels for interaction between agglomerative activity and knowledge exchange. Finally, contrary to previous work in spatial agglomeration, our model suggests that agglomerative environments may be either under-specialized and under-populated or over-specialized and over-populated relative to the social optimum.

Keywords: Econometric; models (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge, nep-gth, nep-ind and nep-ino
Date: 2000
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Related works:
Journal Article: Knowledge exchange, matching, and agglomeration (2006) Downloads
Working Paper: Knowledge Exchange, Matching, and Agglomeration (2006) Downloads
Working Paper: Knowledge Exchange, Matching, and Agglomeration (2004) Downloads
Working Paper: Knowledge Exchange, Matching, and Agglomeration (2003) Downloads
Working Paper: Knowledge Exchange, Matching, and Agglomeration (2003) Downloads
Working Paper: Knowledge Exchange, Matching, and Agglomeration (2000) Downloads
Working Paper: Knowledge Exchange, Matching, and Agglomeration (2000) Downloads
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