A Spatial Knowledge Economy

49 Pages Posted: 22 Jun 2012 Last revised: 29 Apr 2015

See all articles by Donald R. Davis

Donald R. Davis

National Bureau of Economic Research (NBER); Columbia University

Jonathan I. Dingel

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Date Written: June 2012

Abstract

Leading empiricists and theorists of cities have recently argued that the generation and exchange of ideas must play a more central role in the analysis of cities. This paper develops the first system of cities model with costly idea exchange as the agglomeration force. Our model replicates a broad set of established facts about the cross section of cities. It provides the first spatial equilibrium theory of why skill premia are higher in larger cities, how variation in these premia emerges from symmetric fundamentals, and why skilled workers have higher migration rates than unskilled workers when both are fully mobile.

Suggested Citation

Davis, Donald R. and Dingel, Jonathan I., A Spatial Knowledge Economy (June 2012). NBER Working Paper No. w18188, Available at SSRN: https://ssrn.com/abstract=2089260

Donald R. Davis (Contact Author)

National Bureau of Economic Research (NBER) ( email )

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Columbia University ( email )

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Jonathan I. Dingel

University of Chicago - Booth School of Business ( email )

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HOME PAGE: http://www.jdingel.com

National Bureau of Economic Research (NBER) ( email )

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Centre for Economic Policy Research (CEPR) ( email )

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United Kingdom

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