Output per worker is radically unevenly distributed across space. Several authors have asked why the differences are so large between countries and hypothesized that differences in social infrastructure provide an answer. However, differences in output per worker are also very different when...

Knowledge spillovers have recently been analysed by Barde (2009) and Ostbye (2010) in a spatial general equilibrium framework. Both studies lack explicit micro foundations for the spillovers - spillovers just take place and depend on firm density. The models must therefore be seen as reduced...

The paper combines a translog variable cost function, a bargaining model of wage determination and a real option model determining real capital. Using this framework, the effect of factor subsidies on labour demand is estimated, based on aggregate panel data for Norwegian manufacturing industry...

The purpose of this note is to emphasize that the qualitative effect of a labour subsidy on the union's desired wage rate, is highly sensitive to the design of the policy instrument.

This paper adapts the canonical New Economic Geography model for experimental testing of the model's behavioural assumptions by developing a finite-player, finite-horizon dynamic game of migration. Our analysis gives distinctive predictions when migration is consistent with myopic behaviour (MB)...

Output per worker is radically unevenly distributed across space. Several authors have asked why the differences are so large between countries and hypothesized that differences in social infrastructure provide an answer. However, differences in output per worker are also very different when...

A real options approach to investment is used to derive a new full static equilibrium condition for capital within the framework of a restricted variable cost function. Empirical evidence suggests that the use of the traditional equilibrium condition may be grossly misleading.