Standard models of economic development typically ignore geography and transport. In this paper, we argue that we should model the transport sector, as it plays a quantitatively important role.\\ To understand what will determine the importance of the transport sector, consider the transport...

Using national level input-output matrices, we propose a strategy to identify pecuniary externalities operating through the markets for intermediate goods at the local level. Then, controlling for common shocks in a spatial econometric framework, (i) we estimate the e®ect of pecuniary...

There exists significant dispersion in output prices between firms in many industries. As a consequence the value of output is not necessarily a good measure of the quantity of output. Estimation of production functions for these types of goods is thus challenging if quantities and prices of...

Why does the level of economic activity vary so much across space? One reason given is "agglomeration economies," meaning that a firm's or household's production costs (of market and home goods, respectively) are lower when production is carried out in close proximity to other firms and...

The transition from economic stagnation to sustained growth is often modelled with a "population-induced" technical progress which raised the return to human capital. In this literature the effect of population on productivity is assumed instead of being derived from more primary assumptions,...

College attainment differs nearly two-fold across U.S. states. This paper shows that highly educated states employ skill-biased technologies, specialize in skill-intensive industries, but do not pay lower skill premia. A theory based on agglomeration economies is developed to account for these...