As events highlight deep divisions in attitudes between America and Europe, this is a very timely study of different approaches to the problems of domestic inequality and poverty. Based on careful ...and systematic analysis of national data, the authors describe just how much the two continents differ in their level of State engagement in the redistribution of income. Discussing various possible economic explanations for the difference, they cover different levels of pre-tax income, openness, and social mobility; they survey politico-historical differences such as the varying physical size of nations, their electoral and legal systems, and the character of their political parties, as well as their experiences of war; and they examine sociological explanations, which include different attitudes to the poor and notions of social responsibility. Most importantly, they address attitudes to race, calculating that attitudes to race explain half the observed difference in levels of public redistribution of income. This important and provocative analysis will captivate academic and serious lay readers in economics and welfare systems.
Urban resilience Glaeser, Edward L
Urban studies (Edinburgh, Scotland),
01/2022, Letnik:
59, Številka:
1
Journal Article
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Will COVID-19 end the urban renaissance that many cities have experienced since the 1980s? This essay selectively reviews the copious literature that now exists on the long-term impact of natural ...disasters. At this point, the long-run resilience of cities to many forms of physical destruction, including bombing, earthquakes and fires, has been well-documented. The destruction of human capital may leave a longer imprint, but cities have persisted through many plagues over the past millennia. By contrast, economic and political shocks, including deindustrialisation or the loss of capital city status, can enormously harm an urban area. These facts suggest that the COVID-19 pandemic will only significantly alter urban fortunes if it is accompanied by a major economic shift, such as widespread adoption of remote work, or political shifts that could lead businesses and the wealthy to leave urban areas. The combination of an increased ability to relocate with increased local redistribution or deterioration of local amenity levels, or both, could recreate some of the key attributes of the urban crisis of the 1970s.
To explore the impact of coronavirus disease 2019 (COVID-19) on small businesses, we conducted a survey of more than 5,800 small businesses between March 28 and April 4, 2020. Several themes emerged. ...First, mass layoffs and closures had already occurred—just a few weeks into the crisis. Second, the risk of closure was negatively associated with the expected length of the crisis. Moreover, businesses had widely varying beliefs about the likely duration of COVID-related disruptions. Third, many small businesses are financially fragile: The median business with more than $10,000 in monthly expenses had only about 2 wk of cash on hand at the time of the survey. Fourth, the majority of businesses planned to seek funding through the Coronavirus Aid, Relief, and Economic Security (CARES) Act. However, many anticipated problems with accessing the program, such as bureaucratic hassles and difficulties establishing eligibility. Using experimental variation, we also assess take-up rates and business resilience effects for loans relative to grants-based programs.
Historically, urban growth required enough development to grow and transport significant agricultural surpluses or a government effective enough to build an empire. But there has been an explosion of ...poor mega-cities over the last 30 years. A simple urban model illustrates that in closed economies, agricultural prosperity leads to more urbanization, but that in an open economy, urbanization increases with agricultural desperation. The challenge of developing world mega-cities is that poverty and weak governance reduce the ability to address the negative externalities that come with density. This paper models the connection between urban size and institutional failure, and shows that urban anonymity causes institutions to break down. For large cities with weak governments, draconian policies may be the only way to curb negative externalities, suggesting a painful trade-off between dictatorship and disorder. A simple model suggests that private provision of infrastructure to reduce negative externalities is less costly when city populations are low or institutions are strong, but that public provision can cost less in bigger cities.
Empirical research on cities starts with a spatial equilibrium condition: workers and firms are assumed to be indifferent across space. This condition implies that research on cities is different ...from research on countries, and that work on places within countries needs to consider population, income, and housing prices simultaneously. Housing supply elasticity will determine whether urban success reveals itself in the form of more people or higher incomes. Urban economists generally accept the existence of agglomeration economies, which exist when productivity rises with density, but estimating the magnitude of those economies is difficult. Some manufacturing firms cluster to reduce the costs of moving goods, but this force no longer appears to be important in driving urban success. Instead, modern cities are far more dependent on the role that density can play in speeding the flow of ideas. Finally, urban economics has some insights to offer related topics such as growth theory, national income accounts, public economics, and housing prices.
Why do firms cluster near one another? We test Marshall's theories of industrial agglomeration by examining which industries locate near one another, or coagglomerate. We construct pairwise ...coagglomeration indices for US manufacturing industries from the Economic Census. We then relate coagglomeration levels to the degree to which industry pairs share goods, labor, or ideas. To reduce reverse causality, where collocation drives input-output linkages or hiring patterns, we use data from UK industries and from US areas where the two industries are not collocated. All three of Marshall's theories of agglomeration are supported, with input-output linkages particularly important.
Which neighborhoods experience physical improvements? In this paper, we introduce a computer vision method to measure changes in the physical appearances of neighborhoods from time-series ...street-level imagery. We connect changes in the physical appearance of five US cities with economic and demographic data and find three factors that predict neighborhood improvement. First, neighborhoods that are densely populated by college-educated adults are more likely to experience physical improvements—an observation that is compatible with the economic literature linking human capital and local success. Second, neighborhoods with better initial appearances experience, on average, larger positive improvements—an observation that is consistent with “tipping” theories of urban change. Third, neighborhood improvement correlates positively with physical proximity to the central business district and to other physically attractive neighborhoods—an observation that is consistent with the “invasion” theories of urban sociology. Together, our results provide support for three classical theories of urban change and illustrate the value of using computer vision methods and street-level imagery to understand the physical dynamics of cities.
A model in which homebuyers make a modest approximation leads house prices to display three features present in the data but usually missing from rational models: momentum at one-year horizons, mean ...reversion at five-year horizons, and excess longer-term volatility relative to fundamentals. Approximating buyers assume that past prices reflect only contemporaneous demand, just like professional economists who use trends in housing prices to infer trends in housing demand. Consistent with survey evidence, this approximation leads buyers to expect increases in the market value of their homes after recent house price increases.
How effective are restrictions on mobility in limiting COVID-19 spread? Using zip code data across five U.S. cities, we estimate that total cases per capita decrease by 19% for every ten percentage ...point fall in mobility. Addressing endogeneity concerns, we instrument for travel by residential teleworkable and essential shares and find a 25% decline in cases per capita. Using panel data for NYC with week and zip code fixed effects, we estimate a decline of 30%. We find substantial spatial and temporal heterogeneity; east coast cities have stronger effects, with the largest for NYC in the pandemic’s early stages.
The great housing convulsion that buffeted America between 2000 and 2010 has historical precedents, from the frontier land boom of the 1790s to the skyscraper craze of the 1920s. But this time was ...different. There was far less real uncertainty about fundamental economic and geographic trends, making the convulsion even more puzzling. During historic and recent booms, sensible models could justify high prices on the basis of seemingly reasonable projections about stable or growing prices. The recurring error appears to be a failure to anticipate the impact that elastic supply will eventually have on prices, whether for cotton in Alabama in 1820 or land in Las Vegas in 2006. Buyers don't appear to be irrational but rather cognitively limited investors who work with simple heuristic models, instead of a comprehensive general equilibrium framework. Low interest rates rarely seem to drive price growth; underpriced default options are a more common contributor to high prices. The primary cost of booms has not typically been overbuilding, but rather the financial chaos that accompanies housing downturns. PUBLICATION ABSTRACT
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