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Migration and urban economic dynamics

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  • Davis, Morris A.
  • Fisher, Jonas D.M.
  • Veracierto, Marcelo

Abstract

What generates the large amount of heterogeneity and persistence in U.S. city growth rates? To answer this question we construct a dynamic general equilibrium model of urban migration that is consistent with the approximately linear relation between gross and net migration rates that we uncover in a panel of 381 metropolitan statistical areas. Consistency with this relation together with the model’s structure of moving costs delivers a parsimonious reduced form in which competitive equilibrium allocations are given by the solution to a city’s social planner problem subject to quadratic population adjustment costs. A calibrated version of the model indicates that empirically measured total factor productivity shocks account for most of the short-run and long-run population dynamics observed in U.S. data.

Suggested Citation

  • Davis, Morris A. & Fisher, Jonas D.M. & Veracierto, Marcelo, 2021. "Migration and urban economic dynamics," Journal of Economic Dynamics and Control, Elsevier, vol. 133(C).
    • Handle: RePEc:eee:dyncon:v:133:y:2021:i:c:s016518892100169x
    DOI: 10.1016/j.jedc.2021.104234
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    References listed on IDEAS

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    Cited by:

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    5. Radike, Monika & Zuromskis, Tadas, 2023. "Lithuanian physicians practising abroad: Reasons to leave and conditions to return to Lithuania. A survey," Health Policy, Elsevier, vol. 128(C), pages 75-83.

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    More about this item

    Keywords

    Persistent urban decline; Urban economic dynamics; Gross migration; Net migration;
    All these keywords.

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General

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