Urban Networks: Connecting Markets, People, and Ideas

62 Pages Posted: 14 Dec 2015 Last revised: 4 Jan 2016

See all articles by Edward L. Glaeser

Edward L. Glaeser

Harvard University - Department of Economics; Brookings Institution; National Bureau of Economic Research (NBER)

Giacomo A. M. Ponzetto

CREI - Universitat Pompeu Fabra

Yimei Zou

Universitat Pompeu Fabra

Multiple version iconThere are 2 versions of this paper

Date Written: December 2015

Abstract

Should China build mega-cities or a network of linked middle-sized metropolises? Can Europe’s mid-sized cities compete with global agglomeration by forging stronger inter-urban links? This paper examines these questions within a model of recombinant growth and endogenous local amenities. Three primary factors determine the trade-off between networks and big cities: local returns to scale in innovation, the elasticity of housing supply, and the importance of local amenities. Even if there are global increasing returns, the returns to local scale in innovation may be decreasing, and that makes networks more appealing than mega-cities. Inelastic housing supply makes it harder to supply more space in dense confines, which perhaps explains why networks are more popular in regulated Europe than in the American Sunbelt. Larger cities can dominate networks because of amenities, as long as the benefits of scale overwhelm the downsides of density. In our framework, the skilled are more likely to prefer mega-cities than the less skilled, and the long-run benefits of either mega-cities or networks may be quite different from the short-run benefits.

Suggested Citation

Glaeser, Edward L. and Ponzetto, Giacomo A. M. and Zou, Yimei, Urban Networks: Connecting Markets, People, and Ideas (December 2015). NBER Working Paper No. w21794. Available at SSRN: https://ssrn.com/abstract=2703199

Edward L. Glaeser (Contact Author)

Harvard University - Department of Economics ( email )

Littauer Center
Room 315A
Cambridge, MA 02138
United States
617-496-2150 (Phone)
617-496-1722 (Fax)

Brookings Institution

1775 Massachusetts Ave. NW
Washington, DC 20036-2188
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Giacomo A. M. Ponzetto

CREI - Universitat Pompeu Fabra ( email )

Ramon Trias Fargas, 25-27
Barcelona, 08005
Spain
+34 93 542 2829 (Phone)
+34 93 542 2826 (Fax)

HOME PAGE: http://www.crei.cat/people/ponzetto

Yimei Zou

Universitat Pompeu Fabra ( email )

Ramon Trias Fargas, 25-27
Barcelona, E-08005
Spain

Register to save articles to
your library

Register

Paper statistics

Downloads
21
Abstract Views
288
PlumX Metrics