Equilibrium Dynamics in a Model of Growth and Spatial Agglomeration

51 Pages Posted: 17 Dec 2018 Last revised: 12 Apr 2021

See all articles by Shota Fujishima

Shota Fujishima

Hitotsubashi University - Graduate School of Economics

Daisuke Oyama

University of Tokyo - Faculty of Economics

Date Written: April 8, 2021

Abstract

We present a multi-regional endogenous growth model in which forward-looking agents choose their regions to live in, in addition to consumption and capital accumulation paths. The spatial distribution of economic activity is determined by the interplay between production spillover effects and urban congestion effects. We characterize the global stability of the spatial equilibrium states in terms of economic primitives such as agents' time preference and intra- and inter-regional spillovers. We also study how macroeconomic variables at the stable equilibrium state behave according to the structure of the spillover network.

Keywords: Growth, Agglomeration, Continuous-Time Overlapping Generations, Perfect Foresight Dynamics, Potential Function, Spillover Network

JEL Classification: C62, C73, D62, O41, R13

Suggested Citation

Fujishima, Shota and Oyama, Daisuke, Equilibrium Dynamics in a Model of Growth and Spatial Agglomeration (April 8, 2021). Available at SSRN: https://ssrn.com/abstract=3290371 or http://dx.doi.org/10.2139/ssrn.3290371

Shota Fujishima

Hitotsubashi University - Graduate School of Economics ( email )

Naka 2-1
Kunitachi, Tokyo 186-8601
Japan

HOME PAGE: http://https://sites.google.com/view/sfujishima

Daisuke Oyama (Contact Author)

University of Tokyo - Faculty of Economics ( email )

7-3-1 Hongo, Bunkyo-ku
Tokyo 113-0033
Japan

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