Diego Puga (CEMFI), āUrban growth and its aggregate implicationsā
Diego Puga (CEMFI)
Host: Nicolas Gendron CarrierĀ
Field:Ā Urban EconomicsĀ
Date: September 25, 2020
āUrban growth and its aggregate implicationsā (with Gilles Duranton)
Abstract:
We develop an urban growth model where human capital spillovers foster entrepreneurship and learning in heterogenous cities. Incumbent residents limit city expansion through planning regulations so that commuting and housing costs do not outweigh productivity gains. The model builds on strong microfoundations, matches key regularities at the city and economy-wide levels, and generates novel predictions for which we provide evidence. It can be quantified relying on few parameters, provides a basis to estimate the main ones, and remains transparent regarding its mechanisms. We examine various counterfactuals to assess quantitatively the effect of cities on economic growth and aggregate