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Title: Agglomeration, Inequality and Economic Growth
Author: Castells-Quintana, David
Royuela Mora, Vicente
Keywords: Creixement econòmic
Recursos humans
Economia de mercat
Economic growth
Human capital
Market economy
Issue Date: Mar-2014
Publisher: Springer Verlag
Abstract: Agglomeration and income inequality at country level can be both understood as concentration of physical and human capital in the process of economic development. As such, it seems pertinent to analyse their impact on economic growth considering both phenomena together. By estimating a dynamic panel specification at country level, this paper analyses how agglomeration and inequality (both their levels and their evolution) influence long-run economic growth. In line with previous findings, our results suggest that while high inequality levels are a limiting factor for long-run growth, agglomeration processes can be associated with economic growth, at least in countries at early stages of development. Moreover, we find that the growth-enhancing benefits from agglomeration processes depend not only on the country's level of development, but also on its initial income distribution (something, to the best of our knowledge, not considered before). In fact, probably suggesting a social dimension to congestion diseconomies, increasing agglomeration is associated with lower growth when income distribution is particularly unequal.
Note: Versió postprint del document publicat a:
It is part of: Annals of Regional Science, 2014, vol. 52, num. 2, p. 343-366
Related resource:​1007/​s00168-014-0589-1
ISSN: 0570-1864
Appears in Collections:Articles publicats en revistes (Econometria, Estadística i Economia Aplicada)

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