A BEJEAP Topics article.

Abstract

We study how local environmental pollution affects spatial patterns of economic activities when workers can migrate. Based on a New Economic Geography model, we analytically characterize the stability conditions for three different types of equilibria: symmetric spreading, partial and full agglomeration. We show that the extent of agglomeration crucially depends on the damages caused by local pollution. We thereby provide a unified framework for discussing different relationships between the extent of agglomeration and trade freeness that have been found in the literature.

Submitted: January 16, 2007 · Accepted: October 25, 2007 · Published: October 29, 2007

Recommended Citation

Lange, Andreas and Quaas, Martin F. (2007) "Economic Geography and the Effect of Environmental Pollution on Agglomeration," The B.E. Journal of Economic Analysis & Policy: Vol. 7 : Iss. 1 (Topics), Article 52.
Available at: http://www.bepress.com/bejeap/vol7/iss1/art52