A Spatial Knowledge Economy

By Donald R. Davis, Jonathan I. Dingel. The American Economic Review, 2019

228 citations recorded by the source corpus.

Leading empiricists and theorists of cities have recently argued that the generation and exchange of ideas must play a more central role in the analysis of cities. This paper develops the first system of cities model with costly idea exchange as the agglomeration force. The model replicates a broad set of established facts about the cross section of cities. It provides the first spatial equilibrium theory of why skill premia are higher in larger cities and how variation in these premia emerges from symmetric fundamentals. (JEL J24, J31, O31, R12, R23)

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/608b1ede72e991425827c60bb6333255e1d1949d

Citations in the corpus

• What Can Be Learned from Spatial Economics? (2019, unknown): “To the best of our knowledge, Davis and Dingel (2019) are the first who have shown how costly and freely chosen face-to-face contacts across heterogeneous individuals may drive urbanization and the emergence of an urban system.”
• Optimal Spatial Policies, Geography, and Sorting* (2018, unknown): “We rely on a framework that nests two recent strands of quantitative spatial research with spillovers: the location choice model with sorting of heterogeneous workers in Diamond (2016), and the economic geography models in Allen and Arkolakis (2014) and Redding (2016).”
• The Making of the Modern Metropolis: Evidence from London* (2018, unknown): “Our paper connects with the theoretical and empirical literatures on agglomeration, including Henderson (1974), Fujita, Krugman, and Venables (1999), Fujita and Thisse (2002), Davis and Weinstein (2002), Lucas and Rossi-Hansberg (2002), Davis and Dingel (2019) and Kline and Moretti (2014), as review”
• The comparative advantage of cities (2020, unknown): “As in Davis and Dingel (2019), our model features symmetric fundamentals, but skill-biased agglomeration generates cities of heterogeneous sizes.”