Agglomeration and Regional Growth
JEL classification: O40, R11, R12
We review the theoretical links between growth and agglomeration. Growth, in the form of innovation, can be at the origin of catastrophic spatial agglomeration in a cumulative process à la Myrdal. One of the surprising features of the Krugman [Journal of Political Economy 99 (1991) 483–499] model, was that the introduction of partial labor mobility in a standard “new trade model” with trade costs could lead to catastrophic agglomeration. The growth ...