David Nagy (CREI), "The Death and Life of Great British Cities"

"The Death and Life of Great British Cities"

David Nagy (CREI)
November 25, 2022, 3:30 to 5:00 PM
Leacock 429

Host: Nicolas Gendron-Carrier
Field: Urban/Macro

Abstract:
This paper studies how industries shape the life and death of cities. Our analysis exploits the large heterogeneity in the early composition of English and Welsh cities. We first extract built-up clusters from early historical maps, identify (small and large) settlements at the onset of the nineteenth century, and isolate exogenous variation in the nature of their rise during the transformation of the economy up to the end of the nineteenth century. We then estimate the causal impact at the city-level of the early growth and specialization on the later dynamics of cities: Cities which specialize in a few industries experience a decline in the long run. We develop a dynamic spatial model of cities to isolate the forces which govern their life and death. In a static setting, the model captures the role of land, local productivity, and (internal and external) trade in explaining the allocation of economic activity across industries and cities. Intertemporally, the model disentangles the role of aggregate industry dynamics from city-specific externalities. We find that the long-run dynamics of English and Welsh cities is explained to a large extent by such dynamic externalities a la Jacobs.