We investigate the simultaneous impact of output and input market imperfections on the characteristics and size of regional economic activity. Firms, producing imperfect Substitutes, face product specific demand shocks which translate into firm-specific shocks. The more different the products...

This paper presents a general-equilibrium model of Innovation, endogenous growth, and unemployment in a disaggregated economy. Unemployment is analyzed w ithin a dual labor market setting, where the labor market is consisting of a primary high-wage and a secondary low-wage sector. The...