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Did the Death of Distance Hurt Detroit and Help New York?

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Author Info
Edward L. Glaeser
Giacomo A.M. Ponzetto

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Abstract

Urban proximity can reduce the costs of shipping goods and speed the flow of ideas. Improvements in communication technology might erode these advantages and allow people and firms to decentralize. However, improvements in transportation and communication technology can also increase the returns to new ideas, by allowing those ideas to be used throughout the world. This paper presents a model that illustrates these two rival effects that technological progress can have on cities. We then present some evidence suggesting that the model can help us to understand why the past thirty-five years have been kind to idea-producing places, like New York and Boston, and devastating to goods-producing cities, like Cleveland and Detroit.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13710.

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Date of creation: Dec 2007
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Handle: RePEc:nbr:nberwo:13710

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R0 - Urban, Rural, and Regional Economics - - General

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Kim, Sukkoo, 1999. "The Rise of Multiunit Firms in U.S. Manufacturing," Explorations in Economic History, Elsevier, vol. 36(4), pages 360-386, October. [Downloadable!] (restricted)
  2. Ethier, Wilfred J, 1982. "National and International Returns to Scale in the Modern Theory of International Trade," American Economic Review, American Economic Association, vol. 72(3), pages 389-405, June. [Downloadable!] (restricted)
  3. Christopher R. Berry & Edward L. Glaeser, 2005. "The Divergence of Human Capital Levels Across Cities," NBER Working Papers 11617, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Rauch James E., 1993. "Productivity Gains from Geographic Concentration of Human Capital: Evidence from the Cities," Journal of Urban Economics, Elsevier, vol. 34(3), pages 380-400, November. [Downloadable!] (restricted)
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  5. Christopher R. Berry & Edward L. Glaeser, 2005. "The Divergence of Human Capital Levels across Cities," Harvard Institute of Economic Research Working Papers 2091, Harvard - Institute of Economic Research. [Downloadable!]
  6. Elhanan Helpman & Marc J. Melitz & Stephen R. Yeaple, 2004. "Export versus FDI with Heterogeneous Firms," American Economic Review, American Economic Association, vol. 94(1), pages 300-316, March. [Downloadable!] (restricted)
  7. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October. [Downloadable!] (restricted)
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  1. Hong, Junjie & Fu, Shihe, 2008. "Information and communication technologies and geographic concentration of manufacturing industries: Evidence from China," MPRA Paper 7574, University Library of Munich, Germany. [Downloadable!]
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