Real Estate Papers

Document Type

Journal Article

Date of this Version

3-2007

Publication Source

American Economic Review

Volume

97

Issue

1

Start Page

197

Last Page

221

DOI

10.1257/aer.97.1.197

Abstract

With the use of French and US data, new and systematic evidence is provided about the rapid location changes of industries across cities (the fast). Cities are also slowly moving up and down the urban hierarchy (the slow), while the size distribution of cities is skewed to the right and very stable (the still). The model proposed here reproduces these three features. Small, innovation-driven shocks lead to the churning of industries across cities. Then, cities slowly grow or decline following net gains or losses of industries. These changes occur within a stable distribution. The quantitative implications of the model are also explored.

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Date Posted: 27 November 2017

This document has been peer reviewed.