Knowledge Spillovers, Fixed- and Variable-Technology Agglomeration and Dispersion Forces in Economic Geography

We show that standard economic geography model results are enriched by the consideration of potential international differences in productivity levels, because we can give a more complete description of centripetal and centrifugal forces. These will be classified as fixed- and variable-technology agglomeration and dispersion forces. Moreover, we suggest a sufficiently simple way to evaluate the intensities of the above mentioned forces when full agglomeration equilibria are considered. Finally, we show that stability properties change when regional productivity levels depend upon knowledge spillovers which are geographically localized allowing the region with a higher skilled workers density to have higher productivity levels