Pflüger, Michael; Südekum, Jens - In: Journal of Urban Economics 63 (2008) 2, pp. 544-566
This paper studies the social desirability of agglomeration, and the efficiency arguments for policy intervention in a simple, analytically tractable new economic geography model. The location pattern emerging as market equilibrium is 'bubble-shaped', i.e. it features dispersion both at high and...