A common theme in economic geography is that increasing returns to scale at the local level are essential for explaining the geographical distribution of economic activity. These agglomerative forces are often cited as a rationale for policy intervention to attract new firms to areas.
Caution to place makers: Greater firm density does not always promote incumbent firm health
William Kerr, Oliver Falck, Christina Günther, Stephan Heblich, 11 February 2013
Hans-Werner Sinn, Gerlinde Sinn, 9 November 2009
Germany’s political unification has succeeded; its economic unification has not. Twenty years after the fall of the Berlin wall, GDP per capita in the formerly communist area is 69% of that of the former Federal Republic of Germany including West Berlin.
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Adelman, 28 October 2013
Reichlin, Giugliano, 7 November 2013
Holmes, McGrattan, Prescott
Beck, De Haas, Ongena