This paper presents a model in which growth and geographic agglomeration of economic activities are mutually self … reinforcing processes. Industrial agglomeration in one location spurs growth because it reduces the cost of innovation in that … location through a pecuniary externality due to transaction costs. Growth fosters agglomeration because as the sector at the …

We review the theoretical links between growth and agglomeration. Growth, in the form of innovation, can be at the … origin of catastrophic spatial agglomeration in a cumulative process à la Myrdal. One of the surprising features of the … could lead to catastrophic agglomeration. The growth analog to this result is that the introduction of endogenous growth in …

transition period and in the long term, with and without agglomeration economies. Without agglomeration economies, income … country may trigger agglomeration in the rich integrated core. …