This paper models externalities of production across regional economies. Under the assumption that knowledge diffuses without political or administrative barriers, we derive externalities that affect the steady state and the process of growth of each economy. The empirical counterpart of the...

Commuting consists in the fact that an important fraction of workers in developed countries do not reside close to their workplaces but at long distances from them, so they have to travel to their jobs and then back home daily. Catalonia (a Spanish region) is divided in 41 comarcas or small...