‐rival resource like knowledge becomes the most relevant input, small firms and new entrants find it increasingly difficult to be … knowledge, with important negative consequences in terms of overall performance of the economy. We argue that in the knowledge … economy, overcoming inequality and the economic crisis can be part of a single coherent policy. If some essential knowledge is …

, with a disproportionally strong impact on knowledge-based activities, like innovation and research. We present a multi …-area endogenous growth model where abstract knowledge flows at no cost across space but tacit knowledge arises from the interaction … tacit knowledge and reinforces productive specialization. This increases the system-wide growth rate, but at the cost of an …