Logo
Munich Personal RePEc Archive

Agglomeration economies and optimal efficiency wage

Jellal, Mohamed (2014): Agglomeration economies and optimal efficiency wage.

[thumbnail of MPRA_paper_57836.pdf]
Preview
PDF
MPRA_paper_57836.pdf

Download (2MB) | Preview

Abstract

In this paper we consider a model of optimal efficiency and agglomeration economies .Given the presence of urban and social externalities and in the absence of corrective policy, the efficiency wage chosen in decentralized market economy is too high. Indeed, in her optimal choice of wage and employment, the representative firm does not take into account of these agglomeration positive externalities which leads to a sub optimal city size. We have shown that an optimal wage employment allocation exists and can be implemented through a subvention taxation policy if it is available.

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.