Urbanization economies - the effects on productivity and utility created endogenously by larger cities - are a fundamental component of both the economic geography of modern societies and the perpetuation of innovation and economic growth at a national level. Cities account for vast majorities...

Economists traditionally tackle normative problems by computing optimal policy, i.e. the one that maximizes a social welfare function. In practice, however, a succession of marginal changes to a limited number of policy instruments are implemented, until no further improvement is feasible. I...

How do individuals shape societies? How do societies shape individuals? This paper develops a framework for studying the connections between micro and macro phenomena. The framework builds on two ingredients widely used in social science - population and variable. Starting with the simplest case...

We survey the literature on social networks by putting together the economics, sociological and physics/applied mathematics approaches, showing their similarities and differences. We expose, in particular, the two main ways of modeling network formation. While the physics/applied mathematics...

An analytically solvable model of new economic geography is developed. Acquisition of skills is costly for workers but it allows them to earn wages that are larger than those of the unskilled. Moreover, skills acquisition can be subsidized by a regional government. For large transport costs,...

Tax competition for a mobile factor is different in 'new economic geography settings' compared to standard tax competition models. The agglomeration rent which accrues to the mobile factor in the core region can be taxed. Moreover, a tax differential between the core and the periphery can be...

This paper studies the social desirability of agglomeration and the efficiency arguments for policy intervention in a simple, analytically solvable ?new economic geography? model with two trade integrating regions. The location pattern emerging as market equilibrium is ?bubbleshaped?, i.e. it...

This paper presents a simple, analytically solvable Chamberlinian agglomeration model. As in the canonical core-periphery (CP) model, two agglomerative forces are at work. However, the present model exhibits a 'pitchfork bifurcation' rather than the 'tomahawk bifurcation' of the CP model.

A prominent feature of economic geography in America is the positive correlation amongst local incomes, housing costs and city population. This paper embeds a black box agglomeration economy within a more neoclassical general equilibrium model of local wages, rents and population to assess the...