• Table of Contents
    • Abstract
    • Keywords
    • Article
      • A model of urban production externalities and increasing returns
        • Model set-up
        • Input demand and value added
        • Increasing returns to density
        • From increasing returns to density to urban production externalities
      • Empirical approaches and results
        • Increasing returns to city or industry size
        • Increasing returns to density and the productivity of US states
        • Agglomeration effects in Europe
        • Human capital externalities?
    • See Also
    • Bibliography
    • How to cite this article

urban production externalities

Antonio Ciccone
From The New Palgrave Dictionary of Economics, Second Edition, 2008
Edited by Steven N. Durlauf and Lawrence E. Blume
Back to top


Urban production externalities (agglomeration effects) are external effects among producers in areas with a high density of economic activity. Such external effects are the main explanation for why productivity is usually highest in those areas of a country where economic activity is densest. There is some disagreement about the strength of urban production externalities. What is clear, however, is that even weak urban production externalities can explain large spatial differences in productivity.
Back to top


Back to top


Back to top

How to cite this article

Ciccone, Antonio. "urban production externalities." The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 11 December 2017 <http://www.dictionaryofeconomics.com/article?id=pde2008_U000061> doi:10.1057/9780230226203.1775

Download Citation:

as RIS | as text | as CSV | as BibTex