Macroeconomic Implications of Agglomeration

Toni Whited, Jonas Fisher and Morris Davis

No 893, 2013 Meeting Papers from Society for Economic Dynamics

Abstract: Cities exist because of the productivity gains arising from clustering production and workers, a process called agglomeration. How important is agglomeration for aggregate growth? This paper constructs a dynamic stochastic general equilibrium model of cities and uses it to estimate the effect of local agglomeration on aggregate growth. We combine aggregate time series and city-level panel data to estimate our model’s parameters by the Generalized Method of Moments. The estimates imply that local agglomeration has an economically and statistically significant impact on the growth rate of per capita consumption, raising it by about 10 percent.

Date: 2013
New Economics Papers: this item is included in nep-dge, nep-geo and nep-ure
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Macroeconomic Implications of Agglomeration (2014)
Working Paper: Macroeconomic implications of agglomeration (2010)
Working Paper: Macroeconomic Implications of Agglomeration (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed013:893

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