New Economic Geography

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pages: 606 words: 87,358

The Great Convergence: Information Technology and the New Globalization by Richard Baldwin

"Robert Solow", 3D printing, additive manufacturing, Admiral Zheng, agricultural Revolution, air freight, Amazon Mechanical Turk, Berlin Wall, bilateral investment treaty, Branko Milanovic, buy low sell high, call centre, Columbian Exchange, commoditize, Commodity Super-Cycle, David Ricardo: comparative advantage, deindustrialization, domestication of the camel, Edward Glaeser, endogenous growth, Erik Brynjolfsson, financial intermediation, George Gilder, global supply chain, global value chain, Henri Poincaré, imperial preference, industrial cluster, industrial robot, intangible asset, invention of agriculture, invention of the telegraph, investor state dispute settlement, Isaac Newton, Islamic Golden Age, James Dyson, Kickstarter, knowledge economy, knowledge worker, Lao Tzu, low skilled workers, market fragmentation, mass immigration, Metcalfe’s law, New Economic Geography, out of africa, paper trading, Paul Samuelson, Pax Mongolica, profit motive, rent-seeking, reshoring, Richard Florida, rising living standards, Robert Metcalfe, Second Machine Age, Simon Kuznets, Skype, Snapchat, Stephen Hawking, telepresence, telerobotics, The Wealth of Nations by Adam Smith, trade liberalization, trade route, Washington Consensus

Likewise, when globalization causes expansion of one sector and contraction of another, the factors of production used most intensively in the expanding sector tend to win, while those in the contracting sector tend to lose. It is important to recognize two things about the pains of globalization. First, there is no gain from globalization without pain. Second, the solution to this dilemma is to establish a “social contract” that gives all citizens a stake in the gains and a share of the pains. The New Economic Geography The second package of economic logic, the New Economic Geography—known affectionately as NEG by aficionados—explains the riddle of uneven spatial development, which, simply put, is: How can lower trade cost—which should make distance matter less—produce such dramatically unbalanced distributions of economic activity such as cities, and the G7’s outsize share of world gross domestic product (GDP)? The NEG cracks the riddle by focusing on firms’ location decisions.

See also migrations, human; telepresence/telerobotics; three-cascading-constraints view multiple equilibria, 254–256, 255f, 256–257, 258f, 266–267 NAFTA (North American Free Trade Agreement), 75, 135 Naisbitt, John, 283 Napoleonic Wars, 42 national perspective: denationalization of production and, 148–149; free trade and, 147; global value chains and, 146; New Globalization and, 11, 12, 80–81f, 160–161, 165–167, 166f, 170, 175–176, 236–237; Old Globalization (first unbundling) and, 170, 172; policy-rethinking and, 13–14; Ricardo and, 127, 128. See also comparative (competitive) advantage; coordination; land; offshoring; policies; smuggling; spillovers; tariffs and protectionism; unions, labor Netherlands, 56, 235. See also imperialists New Economic Geography (NEG) , 179, 186–196, 189f, 194f, 208–211, 214 The New Geography of Jobs (Moretti), 228, 233, 235 New Globalization (Phase Four) (second unbundling): control and, 174–175, 176; endogenous growth/New Economic Geography and, 193–196, 194f; industrialization and, 7, 8; know-how and, 139; mental models and, 112, 113; moving ideas and, 161–162; North-South back-and-forth trade and, 97; North-South borders and, 151; North-South shift in manufacturing and, 7, 86–89, 142–145; Old Globalization (first unbundling) compared, 6, 138–141, 142–176, 166f–169, 177–220, 221; pace of change and, 170–171, 174, 176; poverty and, 105, 108f, 162–163, 242; predictability and, 171–172, 176; protectionism and, 98, 99–102; summaries, 6, 7, 10–14, 19, 48f–49, 77–78, 109–110, 142–277; winners and losers, 160–164.

Adding Agglomeration to Ricardo In Ricardo’s conceptualization (as in the Doctrine of Universal Economy), the national differences in competencies are assumed rather than explained. To account for the really broad-brush facts of globalization’s first unbundling, it is necessary to adjoin a few more elements to the Ricardian picture. The formal brushstokes were added by Nobel Prize–winning economist Paul Krugman and his coauthors Oxford professor Tony Venables and Kyoto professor Masahisa Fujita. The key ideas of the “new economic geography,” from their book The Spatial Economy, are explained in Chapter 6, but the main lines of logic can be extracted from the historical account in Chapter 2. FIGURE 39: Dynamic comparative advantage: trade, comparative advantage, innovation, and growth are all entwined. Globalization’s first acceleration (that is, the first unbundling) turned the world’s league tables on their head. The previously poor and backward nations in the European peninsula of the Eurasian landmass came to dominate the global economy.


pages: 242 words: 68,019

Why Information Grows: The Evolution of Order, From Atoms to Economies by Cesar Hidalgo

"Robert Solow", Ada Lovelace, Albert Einstein, Arthur Eddington, assortative mating, business cycle, Claude Shannon: information theory, David Ricardo: comparative advantage, Douglas Hofstadter, Everything should be made as simple as possible, frictionless, frictionless market, George Akerlof, Gödel, Escher, Bach, income inequality, income per capita, industrial cluster, information asymmetry, invention of the telegraph, invisible hand, Isaac Newton, James Watt: steam engine, Jane Jacobs, job satisfaction, John von Neumann, Joi Ito, New Economic Geography, Norbert Wiener, p-value, Paul Samuelson, phenotype, price mechanism, Richard Florida, Ronald Coase, Rubik’s Cube, Silicon Valley, Simon Kuznets, Skype, statistical model, Steve Jobs, Steve Wozniak, Steven Pinker, The Market for Lemons, The Nature of the Firm, The Wealth of Nations by Adam Smith, total factor productivity, transaction costs, working-age population

The question of which industries locate where and why has given rise to at least four theoretical streams of literature: the literature on industrial clusters, the “new economic geography” (which is the neoclassical stream of this literature), the economic geography literature focusing on institutions and culture, and the evolutionary economic geography literature. One could argue that these different strands of literature reflect academic alliances and divisions, but I will describe them not in terms of academic divisions but in terms of how they conceptualize sources of economic advantage and the patterns of industrial diversification and specialization found in different locations. First I will consider the approaches that emphasize the role of individuals. These include the neoclassical approaches of Paul Krugman, Masahisa Fujita, and Anthony Venables. As described by Krugman, the new economic geography is a theoretical effort to figure out why industries would locate in a certain location (agglomeration).

As described by Krugman, the new economic geography is a theoretical effort to figure out why industries would locate in a certain location (agglomeration). The goal of the new economic geography is to develop general-equilibrium models that are completely endogenous. These are models where constraints on both money and resources are honored, and where supply, demand, and population are determined endogenously from the models. To achieve its goal, the new economic geography uses a number of theoretical tricks that help make these models tractable. These include the use of Dixit and Stiglitz’s monopolistic competition model (Avinash K. Dixit and Joseph E. Stiglitz, “Monopolistic Competition and Optimum Product Diversity,” American Economic Review 67, no. 3 [1977]: 297–308) or Paul Samuelson’s iceberg costs (Paul A. Samuelson, “The Transfer Problem and Transport Costs, II: Analysis of Effects of Trade Impediments,” Economic Journal 64, no. 254 [1954]: 264–289).

Yet the highly stylized nature of the models has limited their empirical validation. In fact, early efforts to calibrate the models found that these have a tendency to agglomerate that was stronger than that observed in the real economy (see, for example, Paul Krugman, “What’s New About the New Economic Geography?,” Oxford Review of Economic Policy 14, no. 2 [1998]: 7–17), and more recent attempts to find evidence have generated more discussion than answers (see, for example, Stephen J. Redding, “The Empirics of the New Economic Geography,” Journal of Regional Science 50, no. 1 [2010]: 297–311). Another approach that hinges on individuals, albeit differently from the approach followed by the new economic geographers, is the work of urban theorist Richard Florida. Florida has argued forcefully that the competitiveness of urban agglomerations hinges largely on their ability to attract creative individuals (Richard Florida, The Rise of the Creative Class and How It’s Transforming Work, Leisure, Community, and Everyday Life (New York: Basic Books, 2002]).


pages: 362 words: 83,464

The New Class Conflict by Joel Kotkin

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, affirmative action, Affordable Care Act / Obamacare, American Society of Civil Engineers: Report Card, Bob Noyce, California gold rush, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, creative destruction, crony capitalism, David Graeber, deindustrialization, don't be evil, Downton Abbey, Edward Glaeser, Elon Musk, energy security, falling living standards, future of work, Gini coefficient, Google bus, housing crisis, income inequality, informal economy, Internet of things, Jane Jacobs, Jaron Lanier, Jeff Bezos, job automation, John Markoff, John von Neumann, Joseph Schumpeter, Kevin Kelly, labor-force participation, low-wage service sector, Marc Andreessen, Mark Zuckerberg, mass affluent, McJob, McMansion, medical bankruptcy, Nate Silver, New Economic Geography, new economy, New Urbanism, obamacare, offshore financial centre, Paul Buchheit, payday loans, Peter Calthorpe, plutocrats, Plutocrats, post-industrial society, RAND corporation, Ray Kurzweil, rent control, rent-seeking, Report Card for America’s Infrastructure, Richard Florida, Silicon Valley, Silicon Valley ideology, Steve Jobs, technoutopianism, The Death and Life of Great American Cities, Thomas L Friedman, too big to fail, transcontinental railway, trickle-down economics, Tyler Cowen: Great Stagnation, upwardly mobile, urban planning, urban sprawl, War on Poverty, women in the workforce, working poor, young professional

Seifert, “From Creative Economy to Creative Society,” Creativity & Change (The Reinvestment Fund and the Social Impact of the Arts Project), January 2008, http://www.trfund.com/wp-content/uploads/2013/06/Economy.pdf; “Jamie Peck on Struggling With the Creative Class,” interview, ScienceWatch, November 2010, http://archive.sciencewatch.com/dr/fmf/2010/10novfmf/10novfmfPeck; Jamie Peck, “Struggling with the Creative Class,” International Journal of Urban and Regional Research, vol. 29, no. 4 (December 2005): 740–70. 41. Aaron M. Renn, “Is Urbanism the New Trickle-Down Economics?” New Geography, February 7, 2013, http://www.newgeography.com/content/003470-is-urbanism-new-trickle-down-economics; Richard Florida, “More Losers Than Winners in America’s New Economic Geography,” CityLab, January 30, 2013, http://www.citylab.com/work/2013/01/more-losers-winners-americas-new-economic-geography/4465. 42. Joel Kotkin, “The Geography of Aging: Why Millennials Are Headed to the Suburbs,” New Geography, December 9, 2013, http://www.newgeography.com/content/004084-the-geography-of-aging-why-millennials-are-headed-to-the-suburbs. 43. Alan Mallach, “The Heavy Hand of Demographic Change,” Rooflines, February 25, 2013, http://www.rooflines.org/3100/the_heavy_hand_of_demographic_change. 44.


pages: 356 words: 91,157

The New Urban Crisis: How Our Cities Are Increasing Inequality, Deepening Segregation, and Failing the Middle Class?and What We Can Do About It by Richard Florida

affirmative action, Airbnb, basic income, Bernie Sanders, blue-collar work, business climate, Capital in the Twenty-First Century by Thomas Piketty, clean water, Columbine, congestion charging, creative destruction, David Ricardo: comparative advantage, declining real wages, deindustrialization, Donald Trump, East Village, edge city, Edward Glaeser, failed state, Ferguson, Missouri, Gini coefficient, Google bus, high net worth, income inequality, income per capita, industrial cluster, informal economy, Jane Jacobs, jitney, Kitchen Debate, knowledge economy, knowledge worker, land value tax, low skilled workers, Lyft, megacity, Menlo Park, mortgage tax deduction, Nate Silver, New Economic Geography, new economy, New Urbanism, occupational segregation, Paul Graham, plutocrats, Plutocrats, RAND corporation, rent control, rent-seeking, Richard Florida, rising living standards, Ronald Reagan, secular stagnation, self-driving car, Silicon Valley, sovereign wealth fund, superstar cities, the built environment, The Chicago School, The Death and Life of Great American Cities, the High Line, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thorstein Veblen, trickle-down economics, Uber and Lyft, uber lyft, universal basic income, upwardly mobile, urban decay, urban planning, urban renewal, urban sprawl, white flight, young professional

Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Belknap Press of Harvard University Press, 2013); Richard Florida, “The New American Dream,” Washington Monthly, March 2003; Richard Florida, The Flight of the Creative Class (New York: HarperCollins, 2005). 4. Richard Florida, “More Losers Than Winners in America’s New Economic Geography,” CityLab, January 30, 2013, www.citylab.com/work/2013/01/more-losers-winners-americas-new-economic-geography/4465. 5. Joel Kotkin, “Richard Florida Concedes the Limits of the Creative Class,” Daily Beast, March 20, 2013, www.thedailybeast.com/articles/2013/03/20/richard-florida-concedes-the-limits-of-the-creative-class.html; Richard Florida, “Did I Abandon My Creative Class Theory? Not So Fast, Joel Kotkin,” Daily Beast, March 21, 2013, www.thedailybeast.com/articles/2013/03/21/did-i-abandon-my-creative-class-theory-not-so-fast-joel-kotkin.html. 6.


pages: 497 words: 144,283

Connectography: Mapping the Future of Global Civilization by Parag Khanna

"Robert Solow", 1919 Motor Transport Corps convoy, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 9 dash line, additive manufacturing, Admiral Zheng, affirmative action, agricultural Revolution, Airbnb, Albert Einstein, amateurs talk tactics, professionals talk logistics, Amazon Mechanical Turk, Asian financial crisis, asset allocation, autonomous vehicles, banking crisis, Basel III, Berlin Wall, bitcoin, Black Swan, blockchain, borderless world, Boycotts of Israel, Branko Milanovic, BRICs, British Empire, business intelligence, call centre, capital controls, charter city, clean water, cloud computing, collateralized debt obligation, commoditize, complexity theory, continuation of politics by other means, corporate governance, corporate social responsibility, credit crunch, crony capitalism, crowdsourcing, cryptocurrency, cuban missile crisis, data is the new oil, David Ricardo: comparative advantage, deglobalization, deindustrialization, dematerialisation, Deng Xiaoping, Detroit bankruptcy, digital map, disruptive innovation, diversification, Doha Development Round, edge city, Edward Snowden, Elon Musk, energy security, Ethereum, ethereum blockchain, European colonialism, eurozone crisis, failed state, Fall of the Berlin Wall, family office, Ferguson, Missouri, financial innovation, financial repression, fixed income, forward guidance, global supply chain, global value chain, global village, Google Earth, Hernando de Soto, high net worth, Hyperloop, ice-free Arctic, if you build it, they will come, illegal immigration, income inequality, income per capita, industrial cluster, industrial robot, informal economy, Infrastructure as a Service, interest rate swap, Intergovernmental Panel on Climate Change (IPCC), Internet of things, Isaac Newton, Jane Jacobs, Jaron Lanier, John von Neumann, Julian Assange, Just-in-time delivery, Kevin Kelly, Khyber Pass, Kibera, Kickstarter, LNG terminal, low cost airline, low cost carrier, low earth orbit, manufacturing employment, mass affluent, mass immigration, megacity, Mercator projection, Metcalfe’s law, microcredit, mittelstand, Monroe Doctrine, mutually assured destruction, New Economic Geography, new economy, New Urbanism, off grid, offshore financial centre, oil rush, oil shale / tar sands, oil shock, openstreetmap, out of africa, Panamax, Parag Khanna, Peace of Westphalia, peak oil, Pearl River Delta, Peter Thiel, Philip Mirowski, plutocrats, Plutocrats, post-oil, post-Panamax, private military company, purchasing power parity, QWERTY keyboard, race to the bottom, Rana Plaza, rent-seeking, reserve currency, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Scramble for Africa, Second Machine Age, sharing economy, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, six sigma, Skype, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, South China Sea, South Sea Bubble, sovereign wealth fund, special economic zone, spice trade, Stuxnet, supply-chain management, sustainable-tourism, TaskRabbit, telepresence, the built environment, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, Tim Cook: Apple, trade route, transaction costs, UNCLOS, uranium enrichment, urban planning, urban sprawl, WikiLeaks, young professional, zero day

INTER-CITY NETWORKS FLOURISH WITH THE RISE OF “DIPLOMACITY” Credit pai1.11 Learning networks are proliferating among cities sharing lessons in curbing greenhouse gas emissions, integrating sensor technologies into the built environment, promoting public safety, and enhancing societal resilience to natural disasters. There are more such inter-city networks today than international organizations. 12. EUROPE FRAGMENTS AS IT GROWS TOGETHER Credit pai1.12 Europe has a substantial number of separatist movements, but even as it devolves, new nations can become members of the collective European Union (EU). 13. MEGACITIES AS THE NEW ECONOMIC GEOGRAPHY Credit pai1.13 Urban archipelagos represent a growing share of national economies. Moscow, São Paulo, Lagos, and Johannesburg are representative of growth markets where one city dominates the economic landscape. 14. AFRICA’S REMAINING FAULT LINES Credit pai1.14 Africa’s map still features many separatist movements that could lead to the creation of new states, as well as a large number of effectively autonomous provinces within African countries. 15.

pai1.11 Inter-City Networks Flourish with the Rise of “Diplomacity.” Created by University of Wisconsin–Madison Cartography Laboratory. City Leadership Initiative; C40 Cities; University College London (UCL). pai1.12 Europe Fragments as It Grows Together. Created by University of Wisconsin–Madison Cartography Laboratory. Business Insider; European Free Alliance; Natural Earth; Wikipedia. pai1.13 Megacities as the New Economic Geography. Created by University of Wisconsin–Madison Cartography Laboratory. Brookings Institution; International Monetary Fund; Lagos Bureau of Statistics; Natural Earth; Oak Ridge National Library. pai1.14 Africa’s Remaining Fault Lines. Created by University of Wisconsin–Madison Cartography Laboratory. Guardian; Natural Earth. pai1.15 Singapore Expands its Economic Geography. Created by University of Wisconsin–Madison Cartography Laboratory.


pages: 603 words: 182,781

Aerotropolis by John D. Kasarda, Greg Lindsay

3D printing, air freight, airline deregulation, airport security, Akira Okazaki, Asian financial crisis, back-to-the-land, barriers to entry, Berlin Wall, big-box store, blood diamonds, borderless world, Boris Johnson, British Empire, business cycle, call centre, carbon footprint, Cesare Marchetti: Marchetti’s constant, Charles Lindbergh, Clayton Christensen, cleantech, cognitive dissonance, commoditize, conceptual framework, credit crunch, David Brooks, David Ricardo: comparative advantage, Deng Xiaoping, deskilling, digital map, disruptive innovation, edge city, Edward Glaeser, failed state, food miles, Ford paid five dollars a day, Frank Gehry, fudge factor, full employment, future of work, Geoffrey West, Santa Fe Institute, George Gilder, global supply chain, global village, gravity well, Haber-Bosch Process, Hernando de Soto, hive mind, if you build it, they will come, illegal immigration, inflight wifi, intangible asset, interchangeable parts, Intergovernmental Panel on Climate Change (IPCC), intermodal, invention of the telephone, inventory management, invisible hand, Jane Jacobs, Jeff Bezos, Joan Didion, Kangaroo Route, Kickstarter, knowledge worker, kremlinology, low cost airline, Marchetti’s constant, Marshall McLuhan, Masdar, mass immigration, McMansion, megacity, Menlo Park, microcredit, Network effects, New Economic Geography, new economy, New Urbanism, oil shale / tar sands, oil shock, peak oil, Pearl River Delta, Peter Calthorpe, Peter Thiel, pets.com, pink-collar, pre–internet, RFID, Richard Florida, Ronald Coase, Ronald Reagan, Rubik’s Cube, savings glut, Seaside, Florida, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, Skype, smart cities, smart grid, South China Sea, South Sea Bubble, sovereign wealth fund, special economic zone, spice trade, spinning jenny, starchitect, stem cell, Steve Jobs, supply-chain management, sustainable-tourism, telepresence, the built environment, The Chicago School, The Death and Life of Great American Cities, The Nature of the Firm, thinkpad, Thomas L Friedman, Thomas Malthus, Tony Hsieh, trade route, transcontinental railway, transit-oriented development, traveling salesman, trickle-down economics, upwardly mobile, urban planning, urban renewal, urban sprawl, walkable city, white flight, white picket fence, Yogi Berra, zero-sum game

A simple version might read size × air connectivity × local accessibility, and the result can be measured in all kinds of ways, all of them having to do with money. It might be reflected in property values around the hub, or in rents and occupancy rates for office and warehouse space. It can even be seen in the average household incomes of local residents—$172,945 in Southlake, compared to $105,000 in Virginia’s Loudon and Fairfax counties, which share Dulles. The aerotropolis represents what Kasarda describes as a new economic geography, which takes the relationship of location and connectivity into account and prices their true worth accordingly. He didn’t have a chance to apply his theorem to DFW; someone beat him to it. The Aerotropolis on the Hills A few of the glittering towers featured in the opening credits of Dallas are found not downtown but on DFW’s eastern flank, opposite Southlake and Euless. They occupy the remnants of El Ranchito de las Colinas, the Little Ranch of the Hills.

Modern Las Colinas and the freeways running along its edges possess more office space, higher rents, and a higher residential density than downtown Dallas and Ft. Worth. It’s the largest business district from here to Chicago. Carpenter intuitively understood Kasarda’s Law, and so do his disciples at the local Chamber of Commerce. “We sell three things,” its executive director told me, “location, accessibility, and speed.” As sterile as it sounds, Las Colinas is proof of this new economic geography. Fluor’s peripatetic executives turn out to be the exception, not the rule. The majority of inhabitants shuttle only between their cubicles and home. What’s changed is the premium tenants pay for the potential connectivity of the airport. It’s ten minutes away if they need it, and often they do— more and more, in fact. For this reason, airports and their aerotropoli are supplanting downtowns and competing edge cities as the nexus of white-collar work throughout the world.


pages: 265 words: 74,941

The Great Reset: How the Post-Crash Economy Will Change the Way We Live and Work by Richard Florida

banking crisis, big-box store, blue-collar work, business cycle, car-free, carbon footprint, collapse of Lehman Brothers, congestion charging, creative destruction, deskilling, edge city, Edward Glaeser, falling living standards, financial innovation, Ford paid five dollars a day, high net worth, Home mortgage interest deduction, housing crisis, if you build it, they will come, income inequality, indoor plumbing, interchangeable parts, invention of the telephone, Jane Jacobs, Joseph Schumpeter, knowledge economy, low skilled workers, manufacturing employment, McMansion, Menlo Park, Nate Silver, New Economic Geography, new economy, New Urbanism, oil shock, Own Your Own Home, pattern recognition, peak oil, Ponzi scheme, post-industrial society, postindustrial economy, reserve currency, Richard Florida, Robert Shiller, Robert Shiller, secular stagnation, Silicon Valley, Silicon Valley startup, social intelligence, sovereign wealth fund, starchitect, the built environment, The Wealth of Nations by Adam Smith, Thomas L Friedman, total factor productivity, urban decay, urban planning, urban renewal, white flight, young professional, Zipcar

It took every member of the household, adults and children alike, to scrape together the living wage of one person and keep the family afloat. As often as not, that group effort extended beyond the immediate household. How many of us have grown up hearing about the old neighborhood of their parents’ or grandparents’ generation: aunts and uncles and cousins and grandparents living up and down the block or around the corner, all part of a unified support system. That, however, would change with the new economic geography of the Second Reset, as more and more people moved away from these dense and cohesive enclaves to find more privacy and freedom—their private piece of the dream in the new suburbs. Suburbanization had actually begun in the first few decades of the century. As electrical power grids, along with rail and streetcar lines, extended beyond old city limits, construction and population followed.


pages: 250 words: 88,762

The Logic of Life: The Rational Economics of an Irrational World by Tim Harford

activist fund / activist shareholder / activist investor, affirmative action, Albert Einstein, Andrei Shleifer, barriers to entry, Berlin Wall, business cycle, colonial rule, Daniel Kahneman / Amos Tversky, double entry bookkeeping, Edward Glaeser, en.wikipedia.org, endowment effect, European colonialism, experimental economics, experimental subject, George Akerlof, income per capita, invention of the telephone, Jane Jacobs, John von Neumann, law of one price, Martin Wolf, mutually assured destruction, New Economic Geography, new economy, plutocrats, Plutocrats, Richard Florida, Richard Thaler, Ronald Reagan, Silicon Valley, spinning jenny, Steve Jobs, The Death and Life of Great American Cities, the market place, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Malthus, women in the workforce, zero-sum game

But later work by Jaffe, Trajtenberg, and Bronwyn Hall suggested strongly that self-citations indicated real innovative value and weren’t cheap talk at all. The original paper is Adam B. Jaffe, Manuel Trajtenberg, and Rebecca Henderson, “Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations,” Quarterly Journal of Economics 108, no. 3(August 1993): 577–98. I also interviewed Adam Jaffe in November 2006. To see the reason: The canonical model of this argument is the paper that launched the so-called New Economic Geography, Paul Krugman’s elegant “Increasing Returns and Economic Geography,” Journal of Political Economy 99, no. 3(June 1991): 483–99. This and many other Krugman academic papers are available at math.stanford.edu/~lekheng/ krugman/index.html. Looking at the location: David B. Audretsch and Maryann P. Feldman, “R&D Spillovers and the Geography of Innovation and Production,” American Economic Review 86, no. 3(June 1996): 630–40.


pages: 344 words: 94,332

The 100-Year Life: Living and Working in an Age of Longevity by Lynda Gratton, Andrew Scott

3D printing, Airbnb, assortative mating, carbon footprint, Clayton Christensen, collapse of Lehman Brothers, creative destruction, crowdsourcing, delayed gratification, disruptive innovation, diversification, Downton Abbey, Erik Brynjolfsson, falling living standards, financial independence, first square of the chessboard, first square of the chessboard / second half of the chessboard, future of work, gender pay gap, gig economy, Google Glasses, indoor plumbing, information retrieval, intangible asset, Isaac Newton, job satisfaction, longitudinal study, low skilled workers, Lyft, Nelson Mandela, Network effects, New Economic Geography, old age dependency ratio, pattern recognition, pension reform, Peter Thiel, Ray Kurzweil, Richard Florida, Richard Thaler, Second Machine Age, sharing economy, side project, Silicon Valley, smart cities, Stanford marshmallow experiment, Stephen Hawking, Steve Jobs, The Future of Employment, uber lyft, women in the workforce, young professional

., What Millennials Want from Work: How to Maximize Engagement in Today’s Workforce (Center for Creative Leadership; McGraw-Hill, 2016). 15Scharmer, Theory U. 16The novel The Makers by Corey Doctorow is a good fictional explanation of this lifestyle and accreditation process although that novel focuses on how these trends subvert existing organizational trends. 17http://www.kauffman.org/~/media/kauffman_org/research%20reports%20and%20covers/2015/05/kauffman_index_startup_activity_national_trends_2015.pdf 18See Moretti, ‘The New Economic Geography of Jobs’ for a detailed analysis of this specific issue; or Glaeser, E., ‘Triumph of the City’ (Macmillan, 2011) for the general advantages of cities in terms of innovation and creativity from connectedness, scale and competition. 19http://www.economist.com/news/leaders/21573104-internet-everything-hire-rise-sharing-economy 20Ibarra, H., Working Identity: Unconventional Strategies for Reinventing Your Career (Harvard Business School Press, 2003).


pages: 361 words: 97,787

The Curse of Cash by Kenneth S Rogoff

Andrei Shleifer, Asian financial crisis, bank run, Ben Bernanke: helicopter money, Berlin Wall, bitcoin, blockchain, Boris Johnson, Bretton Woods, business cycle, capital controls, Carmen Reinhart, cashless society, central bank independence, cryptocurrency, debt deflation, disruptive innovation, distributed ledger, Edward Snowden, Ethereum, ethereum blockchain, eurozone crisis, Fall of the Berlin Wall, fiat currency, financial exclusion, financial intermediation, financial repression, forward guidance, frictionless, full employment, George Akerlof, German hyperinflation, illegal immigration, inflation targeting, informal economy, interest rate swap, Isaac Newton, Johann Wolfgang von Goethe, Johannes Kepler, Kenneth Rogoff, labor-force participation, large denomination, liquidity trap, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, moveable type in China, New Economic Geography, offshore financial centre, oil shock, open economy, payday loans, price stability, purchasing power parity, quantitative easing, RAND corporation, RFID, savings glut, secular stagnation, seigniorage, The Great Moderation, the payments system, The Rise and Fall of American Growth, transaction costs, unbanked and underbanked, unconventional monetary instruments, underbanked, unorthodox policies, Y2K, yield curve

Financial Times, April 23. ———. 2004. “Globalization and Global Disinflation.” In Proceedings of the Kansas City Federal Reserve Bank Symposium on Monetary Policy and Uncertainty: Adapting to a Changing Economy, Jackson Hole, WY, August 28–30, 2003. Kansas City Federal Reserve Bank. ———. 2007. “Impact of Globalization on Monetary Policy.” In Proceedings of the Kansas City Federal Reserve Bank Symposium on the New Economic Geography: Effects and Policy Implications, Jackson Hole, WY, August 2006. Kansas City Federal Reserve Bank. ———. 2008. “Inflation Is Now the Lesser Evil.” Project Syndicate, December. Available at http://www.project-syndicate.org/commentary/inflation-is-now-the-lesser-evil. ———. 2014. “Costs and Benefits to Phasing Out Paper Currency.” In NBER Macroeconomics Annual, ed. Jonathan Parker and Michael Woodford.


Lectures on Urban Economics by Jan K. Brueckner

affirmative action, Andrei Shleifer, congestion charging, Edward Glaeser, invisible hand, market clearing, mortgage tax deduction, negative equity, New Economic Geography, profit maximization, race to the bottom, rent control, rent-seeking, Ronald Coase, The Nature of the Firm, transaction costs, urban sprawl

Although the citations are not exhaustive, readers seeking more exposure to a topic can always find references to the literature in the works that are cited. Since the book has grown out of my own research on a variety of topics in urban economics, the references include an unavoidably large number of my own papers. Other researchers should recognize that this pattern does not reflect an opinion about relative contributions to the field. Again reflecting my own interests within urban economics, the book contains less material on the New Economic Geography, an area of active research in the field since the early 1990s, than would a book written by an NEG researcher. The material relevant to NEG is confined to chapter 1. The book’s suitability as a text for an undergraduate course in urban economics, or for a series of such courses, would depend on the length of the course(s). All the chapters can be covered in the undergraduate urban sequence at UC Irvine, which runs for two quarters of 10 weeks each.


pages: 550 words: 124,073

Democracy and Prosperity: Reinventing Capitalism Through a Turbulent Century by Torben Iversen, David Soskice

Andrei Shleifer, assortative mating, augmented reality, barriers to entry, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, centre right, cleantech, cloud computing, collateralized debt obligation, collective bargaining, colonial rule, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, deindustrialization, deskilling, Donald Trump, first-past-the-post, full employment, Gini coefficient, hiring and firing, implied volatility, income inequality, industrial cluster, inflation targeting, invisible hand, knowledge economy, labor-force participation, liberal capitalism, low skilled workers, low-wage service sector, means of production, mittelstand, Network effects, New Economic Geography, new economy, New Urbanism, non-tariff barriers, Occupy movement, offshore financial centre, open borders, open economy, passive investing, precariat, race to the bottom, rent-seeking, RFID, road to serfdom, Robert Bork, Robert Gordon, Silicon Valley, smart cities, speech recognition, The Future of Employment, The Great Moderation, The Rise and Fall of American Growth, too big to fail, trade liberalization, union organizing, urban decay, Washington Consensus, winner-take-all economy, working-age population, World Values Survey, young professional, zero-sum game

In Varieties of Capitalism: The Institutional Foundations of Comparative Advantage, eds. Peter A. Hall and David Soskice, 145–83. Oxford: Oxford University Press. Eurofound. 2015. “Workplace Practices—Patterns, Performance, and Well-being.” Third European Company Survey, Overview Report. Luxembourg: Publications Office of the European Union. Feldmann, Maryann P. 2000. “Location and Innovation: The New Economic Geography of Innovation, Spillovers, and Agglomeration.” In The Oxford Handbook of Economic Geography, eds. Gordon Clark, Mayann P. Feldmann, Meric Gertler, and Kate Williams, 373–94. Oxford: Oxford University Press. Fioretos, Orfeo. 2011. Creative Reconstructions: Multilateralism and European Varieties of Capitalism after 1950. Ithaca, NY: Cornell University Press. Flanagan, Robert J., David Soskice, and Lloyd Ulman. 1983.


pages: 477 words: 135,607

The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger by Marc Levinson

"Robert Solow", air freight, anti-communist, barriers to entry, Bay Area Rapid Transit, British Empire, business cycle, call centre, collective bargaining, conceptual framework, David Ricardo: comparative advantage, deindustrialization, deskilling, Edward Glaeser, Erik Brynjolfsson, full employment, global supply chain, intermodal, Isaac Newton, job automation, Jones Act, knowledge economy, Malcom McLean invented shipping containers, manufacturing employment, Network effects, New Economic Geography, new economy, oil shock, Panamax, Port of Oakland, post-Panamax, Productivity paradox, refrigerator car, South China Sea, trade route, Works Progress Administration, Yom Kippur War, zero-sum game

Sprawling industrial complexes where armies of thousands manufactured products from start to finish gave way to smaller, more specialized plants that shipped components and half-finished goods to one another in ever lengthening supply chains. Poor countries, desperate to climb the rungs of the ladder of economic development, could realistically dream of becoming suppliers to wealthy countries far away. Huge industrial complexes mushroomed in places like Los Angeles and Hong Kong, only because the cost of bringing raw materials in and sending finished goods out had dropped like a stone.1 This new economic geography allowed firms whose ambitions had been purely domestic to become international companies, exporting their products almost as effortlessly as selling them nearby. If they did, though, they soon discovered that cheaper shipping benefited manufacturers in Thailand or Italy just as much. Those who had no wish to go international, who sought only to serve their local clientele, learned that they had no choice: like it or not, they were competing globally because the global market was coming to them.


The State and the Stork: The Population Debate and Policy Making in US History by Derek S. Hoff

"Robert Solow", affirmative action, Alfred Russel Wallace, back-to-the-land, British Empire, business cycle, clean water, creative destruction, David Ricardo: comparative advantage, demographic transition, desegregation, Edward Glaeser, feminist movement, full employment, garden city movement, George Gilder, Gunnar Myrdal, immigration reform, income inequality, income per capita, invisible hand, Jane Jacobs, John Maynard Keynes: technological unemployment, Joseph Schumpeter, labor-force participation, manufacturing employment, mass immigration, New Economic Geography, new economy, old age dependency ratio, Paul Samuelson, peak oil, pensions crisis, profit motive, Ralph Waldo Emerson, road to serfdom, Ronald Reagan, Scientific racism, secular stagnation, Simon Kuznets, The Chicago School, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, Thorstein Veblen, trickle-down economics, urban planning, urban sprawl, wage slave, War on Poverty, white flight, zero-sum game

Economist Ralph Hess suggested in The Foundations of National Prosperity, a 1917 collection of essays edited by Richard Ely, “Settlement and industries should be so located as to secure the fullest possible benefits from the natural resources of the country, as well as the benefits of mechanical development and scientific discoveries.”160 Meanwhile, the spread of electrification in the 1920s enhanced the locational flexibility of American firms—and thus supported calls for the state to engineer new economic geographies.161 Resource economists focused on localized pockets of overpopulation where resources had become exhausted but people remained—for example in Appalachia and in the “cut-over” lands of northern Wisconsin and Minnesota, where the timber industry left depleted forests and an economically redundant surplus population in its wake.162 Within the federal government, a Department of Labor study called Employment and Natural Resources, penned by Benton MacKaye, subsequently a co-founder of the Wilderness Society and a leading midcentury conservationist, called for new governmentsponsored communities on public lands to combat inefficient land use (and the deceasing real wages of the American worker).163 US Department of Agriculture economists also promoted the idea of engineering population movements.


pages: 740 words: 161,563

The Discovery of France by Graham Robb

Brownian motion, deindustrialization, Honoré de Balzac, Louis Pasteur, New Economic Geography, Peace of Westphalia, price stability, trade route, urban sprawl

The following year, the Comité des Promenades in Gérardmer (Vosges), set an example that was followed by tourist offices all over France. These missionary organizations trained guides and porters, persuaded rival villages to work together, laid out signposted walks and organized ‘caravanes scolaires’ and ‘colonies de vacances’ for schoolchildren. They also encouraged hotels to display their prices and not overcharge tourists. Long before paid holidays for workers were introduced in 1936, a new economic geography of France was taking shape: the Vosges were the Alps of the petite bourgeoisie, and the mountains of the Auvergne were the poor man’s Pyrenees.40 The touring clubs were pioneers in the tradition of the eighteenth-century map-makers. They not only popularized obscure parts of France, they also discovered them. In 1882, two members of the Club Alpin stumbled on an amazing ‘city of stones’ in the wild uplands of the Causse Noir.


pages: 566 words: 163,322

The Rise and Fall of Nations: Forces of Change in the Post-Crisis World by Ruchir Sharma

Asian financial crisis, backtesting, bank run, banking crisis, Berlin Wall, Bernie Sanders, BRICs, business climate, business cycle, business process, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, centre right, colonial rule, Commodity Super-Cycle, corporate governance, creative destruction, crony capitalism, currency peg, dark matter, debt deflation, deglobalization, deindustrialization, demographic dividend, demographic transition, Deng Xiaoping, Doha Development Round, Donald Trump, Edward Glaeser, Elon Musk, eurozone crisis, failed state, Fall of the Berlin Wall, falling living standards, Francis Fukuyama: the end of history, Freestyle chess, Gini coefficient, hiring and firing, income inequality, indoor plumbing, industrial robot, inflation targeting, Internet of things, Jeff Bezos, job automation, John Markoff, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, knowledge economy, labor-force participation, lateral thinking, liberal capitalism, Malacca Straits, Mark Zuckerberg, market bubble, mass immigration, megacity, Mexican peso crisis / tequila crisis, mittelstand, moral hazard, New Economic Geography, North Sea oil, oil rush, oil shale / tar sands, oil shock, pattern recognition, Paul Samuelson, Peter Thiel, pets.com, plutocrats, Plutocrats, Ponzi scheme, price stability, Productivity paradox, purchasing power parity, quantitative easing, Ralph Waldo Emerson, random walk, rent-seeking, reserve currency, Ronald Coase, Ronald Reagan, savings glut, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, Simon Kuznets, smart cities, Snapchat, South China Sea, sovereign wealth fund, special economic zone, spectrum auction, Steve Jobs, The Future of Employment, The Wisdom of Crowds, Thomas Malthus, total factor productivity, trade liberalization, trade route, tulip mania, Tyler Cowen: Great Stagnation, unorthodox policies, Washington Consensus, WikiLeaks, women in the workforce, working-age population

Wall Street Journal, May 3, 2015. “End of an Era for Oil and the Middle East.” BCA Research, April 9, 2015. Essien, Victor. “Regional Trade Agreements in Africa: A Historical and Bibliographic Account of ECOWAS and CEMAC.” NYU Global, 2006. “Fortnightly Thoughts: Brighter Lights, Bigger Cities.” Goldman Sachs Global Investment Research, November 21, 2013. Fujita, Masahisa, and Paul Krugman. “The New Economic Geography: Past, Present, and the Future.” Papers in Regional Science 83 (2004): 139–64. Glaeser, Edward L., and Albert Saiz. “The Rise of the Skilled City.” National Bureau of Economic Research, Working Paper no. 10191, December 2003. Guha, Ramachandra. “Ideas of Public Service.” Telegraph, July 11, 2015. Holland, Robert. “Why Hasn’t Globalization Killed Manufacturing Clusters.” Harvard Business School, 2015.


pages: 537 words: 200,923

City: Urbanism and Its End by Douglas W. Rae

agricultural Revolution, barriers to entry, business climate, City Beautiful movement, complexity theory, creative destruction, desegregation, edge city, ghettoisation, Gunnar Myrdal, income per capita, informal economy, information asymmetry, interchangeable parts, invisible hand, James Watt: steam engine, Jane Jacobs, joint-stock company, Joseph Schumpeter, Kickstarter, manufacturing employment, New Economic Geography, new economy, New Urbanism, Peter Calthorpe, plutocrats, Plutocrats, Saturday Night Live, the built environment, The Death and Life of Great American Cities, the market place, urban planning, urban renewal, War on Poverty, white flight, Works Progress Administration

No manufacturing plant is permanently secure against novel competition, no system of transportation permanently withstands disruptive change, no corporation is immune to takeover or bankruptcy. No store can be insured against the disappearance of its customers or the obsolescence of its merchandise. No profitable line of business—from hotels to stores specializing in caged birds, from stationery stores to saloons—will stand for long undisturbed by the curiosity of would-be competitors. No place—city, suburb, hamlet, or farmstead—is secure against the emergence of a new economic geography that drains vital populations and investments in the space of a few decades. In seeking ever fresh forms of production, ever larger markets, ever higher returns on investment, capitalism routinely destroys older ways of doing business, older technologies, older plants—and in so doing profoundly transforms the communities that have formed around them. Downward-sloping change in a city typically unfolds without a big bang, without an eruption that makes headlines, but instead by the rapid accumulation of small changes.


pages: 976 words: 235,576

The Meritocracy Trap: How America's Foundational Myth Feeds Inequality, Dismantles the Middle Class, and Devours the Elite by Daniel Markovits

"Robert Solow", 8-hour work day, activist fund / activist shareholder / activist investor, affirmative action, Anton Chekhov, asset-backed security, assortative mating, basic income, Bernie Sanders, big-box store, business cycle, capital asset pricing model, Capital in the Twenty-First Century by Thomas Piketty, carried interest, collateralized debt obligation, collective bargaining, computer age, corporate governance, corporate raider, crony capitalism, David Brooks, deskilling, Detroit bankruptcy, disruptive innovation, Donald Trump, Edward Glaeser, Emanuel Derman, equity premium, European colonialism, everywhere but in the productivity statistics, fear of failure, financial innovation, financial intermediation, fixed income, Ford paid five dollars a day, Frederick Winslow Taylor, full employment, future of work, gender pay gap, George Akerlof, Gini coefficient, glass ceiling, helicopter parent, high net worth, hiring and firing, income inequality, industrial robot, interchangeable parts, invention of agriculture, Jaron Lanier, Jeff Bezos, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, knowledge economy, knowledge worker, Kodak vs Instagram, labor-force participation, longitudinal study, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, mass incarceration, medical residency, minimum wage unemployment, Myron Scholes, Nate Silver, New Economic Geography, new economy, offshore financial centre, Paul Samuelson, payday loans, plutocrats, Plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, precariat, purchasing power parity, rent-seeking, Richard Florida, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, school choice, shareholder value, Silicon Valley, Simon Kuznets, six sigma, Skype, stakhanovite, stem cell, Steve Jobs, supply-chain management, telemarketer, The Bell Curve by Richard Herrnstein and Charles Murray, Thomas Davenport, Thorstein Veblen, too big to fail, total factor productivity, transaction costs, traveling salesman, universal basic income, unpaid internship, Vanguard fund, War on Poverty, Winter of Discontent, women in the workforce, working poor, young professional, zero-sum game

have college degrees: “Educational Attainment of Population Ages 25 to 34,” Kids Count Data Center, last modified October 2017, https://datacenter.kidscount.org/data/tables/6294-educational-attainment-of-population-ages-25-to-34#detailed/3/10,55-56,58-61,64-77,79-84,86,88-94,96-109,9428-9429/false/870,573,869,36,868,867,133,38,35,18/5924,1265,1309,1304,1311/13091,13090. all average nearly 50 percent: See Paul A. Jargowsky, “Take the Money and Run: Economic Segregation in U.S. Metropolitan Areas,” American Sociology Review 61, no. 6 (1996): 984–98. Hereafter cited as Jargowsky, “Take the Money and Run.” Bishop, The Big Sort, 131. Richard Florida, “More Losers Than Winners in America’s New Economic Geography,” CityLab, January 30, 2013, accessed November 19, 2018, http://www.citylab.com/work/2013/01/more-losers-winners-americas-new-economic-geograpy/4465/. fell by 15 percent: See Catherine Rampell, “Who Says New York Is Not Affordable?,” New York Times Magazine, April 23, 2013, accessed November 19, 2018, www.nytimes.com/2013/04/28/magazine/who-says-new-york-is-not-affordable.html. a handful of large cities: See Bishop, The Big Sort, 132.