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The Economics of Agglomeration

William C. Strange

This research review discusses some of the most essential papers encompassing agglomeration economies. Agglomeration economies are manifested in cities and industry clusters shaping the neighborhoods and the regions that contain them. The review analyses econometric methods and data improvements, geographic scales at which agglomeration economies operate, micro-neighborhoods and mega-regions. The author also uncovers the forces driving the field including labor markets, input markets and dynamic phenomena such as innovation, technology change and growth.