Optimal Agglomerations in Dynamic Economics

49 Pages Posted: 16 Oct 2012

See all articles by William A. Brock

William A. Brock

University of Wisconsin, Madison - Department of Economics; University of Missouri at Columbia - Department of Economics

Anastasios Xepapadeas

Athens University of Economics and Business; University of Bologna - School of Economics, Management, and Statistics

A.N. Yannacopoulos

Athens University of Economics and Business

Date Written: October 15, 2012

Abstract

We study rational expectations equilibrium problems and social optimum problems in infinite horizon spatial economies in the context of a Ramsey type capital accumulation problem with geographical spillovers. We identify sufficient local and global conditions for the emergence (or not) of optimal agglomeration, using techniques from monotone operator theory and spectral theory in infinite dimensional Hilbert spaces. Our analytical methods can be used to systematically study optimal potential agglomeration and clustering in dynamic economics.

Keywords: agglomeration, spatial spillovers, spillover induced instability, rational expectations equilibrium, social optimum, monotone operators

JEL Classification: C61, R11

Suggested Citation

Brock, William A. and Xepapadeas, Anastasios and Yannacopoulos, Athanasios, Optimal Agglomerations in Dynamic Economics (October 15, 2012). FEEM Working Paper No. 64.2012, Available at SSRN: https://ssrn.com/abstract=2161785 or http://dx.doi.org/10.2139/ssrn.2161785

William A. Brock (Contact Author)

University of Wisconsin, Madison - Department of Economics ( email )

1180 Observatory Drive
Madison, WI 53706
United States
608-263-6655 (Phone)
608-263-3876 (Fax)

University of Missouri at Columbia - Department of Economics ( email )

118 Professional Building
Columbia, MO 65211
United States

Anastasios Xepapadeas

Athens University of Economics and Business ( email )

76 Patission Street
Athens, 104 34
Greece

University of Bologna - School of Economics, Management, and Statistics ( email )

Piazza Scaravilli 1
40126 Bologna, fc 47100
Italy

Athanasios Yannacopoulos

Athens University of Economics and Business ( email )

76 Patission Street
Athens, 104 34
Greece

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