Arbeitspapier

Environmental policy, spatial spillovers and the emergence of economic agglomerations

We explain the spatial concentration of economic activity, in a model of economic geography, when the cost of environmental policy - which is increasing in the concentration of emissions - and an immobile production factor act as centrifugal forces, while positive knowledge spillovers and iceberg transportation costs act as centripetal forces. We study the agglomeration effects caused by trade-offs between centripetal and centrifugal forces. The above effects govern firms' location decisions and as a result, they define the distribution of economic activity across space. We derive the rational expectations equilibrium and the social optimum, compare the outcomes and characterize the optimal spatial policies.

Language
Englisch

Bibliographic citation
Series: Nota di Lavoro ; No. 70.2009

Classification
Wirtschaft
Subject
Agglomeration
Spatial Economics
Environmental Policy
Knowledge Spillovers
Transportation Cost

Event
Geistige Schöpfung
(who)
Kyriakopoulou, Efthymia
Xepapadeas, Anastasios
Event
Veröffentlichung
(who)
Fondazione Eni Enrico Mattei (FEEM)
(where)
Milano
(when)
2009

Handle
Last update
10.03.2025, 11:41 AM CET

Data provider

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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.

Object type

  • Arbeitspapier

Associated

  • Kyriakopoulou, Efthymia
  • Xepapadeas, Anastasios
  • Fondazione Eni Enrico Mattei (FEEM)

Time of origin

  • 2009

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