A Spatial Knowledge Economy
Donald Davis () and
Jonathan Dingel ()
No 18188, NBER Working Papers from National Bureau of Economic Research, Inc
Leading empiricists and theorists of cities have recently argued that the generation and exchange of ideas must play a more central role in the analysis of cities. This paper develops the first system of cities model with costly idea exchange as the agglomeration force. Our model replicates a broad set of established facts about the cross section of cities. It provides the first spatial equilibrium theory of why skill premia are higher in larger cities, how variation in these premia emerges from symmetric fundamentals, and why skilled workers have higher migration rates than unskilled workers when both are fully mobile.
JEL-codes: F1 F22 J24 J61 R1 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-geo, nep-mig and nep-ure
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Published as Donald R. Davis & Jonathan I. Dingel, 2019. "A Spatial Knowledge Economy," American Economic Review, vol 109(1), pages 153-170.
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