agglomeration economy

noun

: a localized economy in which a large number of companies, services, and industries exist in close proximity to one another and benefit from the cost reductions and gains in efficiency that result from this proximity

The existence of agglomeration economies can imply different things for local and national policymakers.

—Edward L. Glaeser, Agglomeration Economics, 2010

Word History

First Known Use

1975, in the meaning defined above

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