Papers of the Day

There are a few new papers out that I’ve been waiting to dig into, but I haven’t yet had time, so to make my life easier I’m going to post them here so I know where they are.

First up, Kristian Behrens and Frédéric Robert-Nicoud, “Survival of the Fittest in Cities: Agglomeration, Selection and Polarisation.” Abstract:

Empirical studies consistently report that labour productivity and TFP [total factor productivity] rise with city size. The reason is that cities attract the most productive agents, select the best of them, and make the selected ones even more productive via various agglomeration economies. This paper provides a microeconomically founded model of vertical city differentiation in which the latter two mechanisms (`agglomeration’ and `selection’) operate simultaneously. Our model is both rich and tractable enough to allow for a detailed investigation of when cities emerge, what determines their size, and how they interact through the channels of trade. We then uncover stylised facts and suggestive econometric evidence that are consistent with the most distinctive equilibrium features of our model. We show, in particular, that larger cities are both more productive and more unequal (`polarised’), that inter-city trade is associated with higher income inequalities, and that the proximity of large urban centres inhibits the development of nearby cities.

Next is Jeffrey Lin, “Technological Adaptation, Cities, and New Work.”

Where does adaptation to innovation take place? I present evidence on the role of agglomeration economies in the application of new knowledge to production. All else equal, workers are more likely to be observed in new work in locations that are initially dense in both college graduates and industry variety. This pattern is consistent with economies of density from the geographic concentration of factors and markets related to technological adaptation. A main contribution is to use a new measure, based on revisions to occupation classifications, to closely characterize cross-sectional differences across U.S. cities in adaptation to technological change. Worker-level results also provide new evidence on the skill bias of recent innovations.

Finally, we have Julian Christ, “New Economic Geography reloaded: localized knowledge spillovers and the geography of innovation.” The abstract is a little dull, but if you want to have a look at the paper, you can go here (PDF).

A fun game to play with economic geography papers, particularly those that focus on urban agglomerations, is to see how many of them include what has become the John 3:16 of the field. In the words of Alfred Marshall:

When an industry has thus chosen a locality for itself, it is likely to stay there long: so great are the advantages which people following the same skilled trade get from near neighbourhood to one another. The mysteries of trade become no mysteries; but are as it were in the air, and children learn many of them unconsciously.

The bolded portion has to be one of the most quoted phrases in all of economics.


One Response to “Papers of the Day”

  1. D.Schleicher Says:

    Ryan — there’s no way around using that quote. Others that are only slightly less ubiquitous (including in my work): the “sidewalk ballet” quote from Death and Life of American Cities and the Lucas ““What can people be paying Manhattan or downtown Chicago rents for, if not for being near other people.”

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