[Séminaire CREM] "A dynamic theory of the urban network" - Faculté Des Sciences Economiques

Co-écrit avec Modibo Sidibé (Duke University)

Abstract: This paper proposes a dynamic theory of the urban network based on geography. When cities are anchored in specific locations and labor mobility is subject to spatial frictions, the interplay between firms’ entry decisions and workers’ migration strategies generates an equilibrium allocation where the most productive firms and workers cluster into the largest cities. Small deviations from isotropy create non-convexities that translate into highly skewed city size distributions, even if individual heterogeneity is uniformly distributed and technology operates under constant returns to scale. The model delivers sufficient statistics to identify key urban phenomena and can be used to analyze place-based policies.