Description:
This course provides an applied introduction to Quantitative Spatial Models (QSMs) of internal city structure and economic geography. We start from neoclassical urban economics and the standard spatial equilibrium framework. We then expand into the spatial general equilibrium to integrate labour and land markets, and add worker heterogeneity to obtain closed-form solutions for discrete location choices. The course is applied in the sense that the main objective is to enable students to simulate QSMs to perform counterfactual analyses of spatial shocks and policies. To this end, we will be i) working with spatial data to generate the necessary model inputs; ii) setting, estimating, and inverting the primitives of the model; iii) using numerical procedures to solve for the spatial general equilibrium.
Using these skills, students in their final coursework will simulate the effects of a major transport infrastructure expansion on the spatial distribution of population, employment, wages, property prices, and the effect on aggregate GDP.
This course is designed for students with a research interest in spatial economics, including students considering an academic career. Therefore, students are expected to attend the Berlin Quantitative Spatial Economics Research Seminar, which will take place right after the tutorials. This is a unique opportunity to see leading spatial economists presenting their research and engage with the speakers and the spatial economics community in Berlin. The speaker schedule is available from the BQSE website www.bqse.de.
Recommended Module or Comparable Previous Knowledge: Students should have formal training in econometrics equivalent to "Advanced Econometrics" and in microeconomics equivalent to "Advanced Microeconomic Analysis". Experience in coding for data analysis is essential. Experience in using geographic information systems will be helpful.
Further information can be found in the syllabus.
Literature:
Ahlfeldt, G. M., J. Barr (2022). “The Economics of Skyscrapers: A Synthesis”. Journal of Urban Economics. 129. https://doi.org/10.1016/j.jue.2021.103419
Ahlfeldt, G. M., S. J. Redding, D. M. Sturm, N. Wolf (2015): “The Economics of Density: Evidence from the Berlin Wall”. Econometrica, 83:6, p. 2127-2189. https://doi.org/10.3982/ECTA10876
Brueckner, J. (1987). "The Structure of Urban Equilibria: A Unified Treatment of the Muth-Mills Model”. Handbook of Regional and Urban Economics, Volume 2, 1987, Pages 821-845. https://doi.org/10.1016/S1574-0080(87)80006-8
Roback, J. (1982). Wages, Rents, and the Quality of Life. Journal of Political Economy, 90:6, 1257–1278. http://www.jstor.org/stable/1830947
Monte, F., S. J. Redding, E. Rossi-Hansberg (2018): “Commuting, Migration, and Local Employment Elasticities”. American Economic Review, 108:12, 3855-90. https://doi.org/10.1257/aer.20151507
Redding, S. J. and E. Rossi-Hansberg (2017): “Quantitative Spatial Economics”. Annual Review of Economics 2017 9:1, 21-58. doi.org/10.1146/annurev-economics-063016-103713
Time & venue:
Lectures/ tutorials: Thursdays, 10:00-12:00 & Fridays, 14:00-16:00; both HU Berlin, Spandauer Str. 1, room 23
Exam:
Term paper
More information can be found in the syllabus.
Gabriel Ahlfeldt
