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Micro-Foundations of Urban Agglomeration Economies

Gilles Duranton
London School of Economics & Political Science (LSE) - Department of Geography and Environment; Centre for Economic Policy Research (CEPR)

Diego Puga
IMDEA Social Sciences; University of Toronto - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

August 2003

NBER Working Paper No. W9931

Abstract:
This handbook chapter studies the theoretical micro-foundations of urban agglomeration economies. We distinguish three types of micro-foundations, based on sharing, matching, and learning mechanisms. For each of these three categories, we develop one or more core models in detail and discuss the literature in relation to those models. This allows us to give a precise characterisation of some of the main theoretical underpinnings of urban agglomeration economies, to discuss modelling issues that arise when working with these tools, and to compare different sources of agglomeration economies in terms of the aggregate urban outcomes they produce as well as in terms of their normative implications.

JEL Classifications: R12, R13, R32

Working Paper Series

Date posted: September 01, 2003 ; Last revised: November 14, 2003

Suggested Citation

Duranton, Gilles and Puga, Diego, Micro-Foundations of Urban Agglomeration Economies (August 2003). NBER Working Paper No. W9931. Available at SSRN: http://ssrn.com/abstract=439613

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Contact Information

Diego Puga (Contact Author) IMDEA Social Sciences ( email ) Calle Veláquez 76 Madrid 28001 Spain
University of Toronto - Department of Economics ( email ) 150 St. George Street Toronto, Ontario M5S 3G7 Canada 416-978-4375 (Phone) 416-978-6713 (Fax) HOME PAGE: http://dpuga.economics.utoronto.ca/
Centre for Economic Policy Research (CEPR) 90-98 Goswell Road London EC1V 7RR United Kingdom
National Bureau of Economic Research (NBER) 1050 Massachusetts Avenue Cambridge, MA 02138 United States
Gilles Duranton London School of Economics & Political Science (LSE) - Department of Geography and Environment ( email ) Houghton Street WC2A 2AE London United Kingdom +44 20 7955 7604 (Phone) +44 20 7955 7412 (Fax)
Centre for Economic Policy Research (CEPR) 90-98 Goswell Road London EC1V 7RR United Kingdom