Location: 368A Heady Hall
Description: Satyajit Chatterjee (Federal Reserve Bank of Philadelphia)
"Agglomeration Economies, Geography and the Value of Urban Land"
(co-authored with Burcu Eyigungor)
Abstract: We examine how growth in wages and residential rents are affected by land supply constraints. Our city model incorporates production externalities and allows firms and workers to choose location as well as intensity of land use. When business structures cannot adjust (short run), cities with more severe constraints on the supply of urban land see higher growth in wages and rents in response to a positive shock to the demand for urban land. But, when business structures can adjust (long run), cities with more severe constraints experience lower growth in wages and rents as they are less able to exploit the positive external effects of greater employment density.
Contact Person: Juan Carlos Cordoba