6533b825fe1ef96bd1282508

RESEARCH PRODUCT

Economic geography and growth: recent advances and new results

subject

description

Two fields of economic theory have developed recently in parallel: on the one hand, economic geography aims to explain the formation of a heterogeneous space, i.e.how the agglomeration of households and firms determines differentiated regions, urban structures or urban systems; on the other hand, theories of endogenous growth propose new views on growth mechanisms which invalidate the traditional convergence rule. Thesetheories are based on common foundations such as increasing returns, spatial externalities and monopolistic competition. We examine here in some detail how the spatial dimension is implicit in endogenous growth theories. We emphasize the whys and wherefores of the combination of these two theories, showing what new results can be derived and what the limits of this new approach are.