Date of this Version
American Economic Review
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.
Duranton, G. (2007). Urban Evolutions: The Fast, the Slow, and the Still. American Economic Review, 97 (1), 197-221. http://dx.doi.org/10.1257/aer.97.1.197
Date Posted: 27 November 2017
This document has been peer reviewed.