Working Paper: CEPR ID: DP3208
Authors: Danny Quah
Abstract: This Paper develops a model of economic growth and activity locating endogenously on a 3-dimensional featureless global geography. The same economic forces influence simultaneously growth, convergence, and spatial agglomeration and clustering. Economic activity is not concentrated on discrete isolated points but instead a dynamically-fluctuating, smooth spatial distribution. Spatial inequality is a Cass-Koopmans saddlepath, and the global distribution of economic activity converges towards egalitarian growth. Equality is stable but spatial inequality is needed to attain it.
Keywords: cluster; continuous space; convergence; distribution dynamics; globalization; growth; knowledge; saddlepath dynamics; spatial inequality; spatial spillovers
JEL Codes: D30; O10; O41
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| knowledge accumulation (O36) | spatial agglomerations (R12) |
| knowledge spillovers (O36) | economic activity (E20) |
| spatial inequality (R12) | egalitarian growth (O40) |
| number of spatial modes (C49) | income distributions (D31) |
| spatial agglomerations (R12) | economic growth (O49) |
| historical and geographical factors (N93) | spatial distributions of economic activity (R12) |