This paper demonstrates that a pollution tax with a fixed cost component may lead, by itself, to segregation between clean and dirty firms without heterogeneous preferences or increasing returns. We construct a simple model with two locations and two industries (clean and dirty) where pollution...

There have been long-term trends of urbanization and sustained growth across developed and developing countries over the past two centuries. Not only have more cities formed, but the leading metropolises have grown larger, with a number of peripheral subcenters developing over time. Conventional...