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A quantitative assessment of the role of agglomeration economies in the spatial concentration of U.S. employment

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  • Satyajit Chatterjee

Abstract

This paper seeks to quantify the contribution of agglomeration economies to the spatial concentration of U.S. employment. A spatial macroeconomic model with heterogeneous localities and agglomeration economies is developed and calibrated to U.S. data on the spatial distribution of employment. The model is used to answer the question: By how much would the spatial concentration of employment decline if agglomeration economies were counterfactually suppressed? For the most plausible calibration, the answer is about 48 percent. More generally, the general equilibrium contribution of agglomeration economies appears to be substantial, with empirically defensible calibrations yielding estimates between 40 and 60 percent.

Suggested Citation

  • Satyajit Chatterjee, 2006. "A quantitative assessment of the role of agglomeration economies in the spatial concentration of U.S. employment," Working Papers 06-20, Federal Reserve Bank of Philadelphia.
    • Handle: RePEc:fip:fedpwp:06-20
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    References listed on IDEAS

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    Cited by:

    1. Niels Vermeer & Wouter Vermeulen, 2011. "External Benefits of Brownfield Redevelopment: An Applied Urban General Equilibrium Analysis," CPB Discussion Paper 178, CPB Netherlands Bureau for Economic Policy Analysis.
    2. Niels Vermeer & Wouter Vermeulen, 2011. "External Benefits of Brownfield Redevelopment: An Applied Urban General Equilibrium Analysis," CPB Discussion Paper 178.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    3. Vermeulen, Wouter, 2011. "Agglomeration externalities and urban growth controls," LSE Research Online Documents on Economics 57852, London School of Economics and Political Science, LSE Library.
    4. Hoyt Bleakley & Jeffrey Lin, 2015. "History and the Sizes of Cities," American Economic Review, American Economic Association, vol. 105(5), pages 558-563, May.
    5. Niels Vermeer & Wouter Vermeulen, 2012. "External Benefits of Brownfield Redevelopment: An Applied Urban General Equilbirum Analysis," SERC Discussion Papers 0099, Centre for Economic Performance, LSE.
    6. Wouter Vermeulen, 2011. "Agglomeration Externalities and Urban Growth Controls," CPB Discussion Paper 191, CPB Netherlands Bureau for Economic Policy Analysis.
    7. Wouter Vermeulen, 2017. "Agglomeration externalities and urban growth controls," Journal of Economic Geography, Oxford University Press, vol. 17(1), pages 59-94.
    8. Vermeer, Niels & Vermeulen, Wouter, 2012. "External benefits of brownfield redevelopment: an applied urban general equilbirum analysis," LSE Research Online Documents on Economics 58337, London School of Economics and Political Science, LSE Library.
    9. Wouter Vermeulen, 2011. "Agglomeration Externalities and Urban Growth Controls," CPB Discussion Paper 191.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    10. Vermeer Niels & Vermeulen Wouter, 2012. "External Benefits of Brownfield Redevelopment: An Applied Urban General Equilibrium Analysis," Journal of Benefit-Cost Analysis, De Gruyter, vol. 3(3), pages 1-33, August.

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