Capital Shocks and the Great Urban Divide

57 Pages Posted: 22 Mar 2021 Last revised: 23 May 2022

See all articles by Michiel N. Daams

Michiel N. Daams

University of Groningen

Philip McCann

affiliation not provided to SSRN

Paolo Veneri

Organization for Economic Co-Operation and Development (OECD)

Richard J. Barkham

University of Reading

Dennis Schoenmaker

affiliation not provided to SSRN

Date Written: March 2, 2021

Abstract

This paper exploits signals of capital pricing and availability in US cities which are obtained from uniquely-detailed data on real estate investments. We identify how places were differently affected by the global financial crisis and provide insights which offer an alternative explanation of why US economic growth continues to experience spatial divergence after many decades of convergence. Investment pricing uncovers that before the crisis capital was allocated efficiently across localities, whereas the global financial shock favored large and prosperous places. These findings point to persistent post-crisis asymmetry in local capital market conditions and underscore the capital risk-safety aspects of agglomeration.

Keywords: capital shocks, risks, cities, real estate, global financial crisis

JEL Classification: R32, R51, R12, N22, G01

Suggested Citation

Daams, Michiel N. and McCann, Philip and Veneri, Paolo and Barkham, Richard J. and Schoenmaker, Dennis, Capital Shocks and the Great Urban Divide (March 2, 2021). Available at SSRN: https://ssrn.com/abstract=3795957 or http://dx.doi.org/10.2139/ssrn.3795957

Michiel N. Daams (Contact Author)

University of Groningen ( email )

Landleven 1
Groningen, 9747 AD
Netherlands

Philip McCann

affiliation not provided to SSRN

Paolo Veneri

Organization for Economic Co-Operation and Development (OECD) ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

Richard J. Barkham

University of Reading ( email )

Whiteknights
Reading RG6 6AW, Berkshire
United Kingdom

Dennis Schoenmaker

affiliation not provided to SSRN

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
95
Abstract Views
484
rank
370,652
PlumX Metrics