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Journal Article
Housing Services Inflation May Decline Only Gradually
The inflation rate for housing services remains about 2 percentage points above its 2019 level. Several factors are likely to slow its decline, including more than a decade of underbuilding prior to the pandemic, limited capacity to increase the nation’s housing stock, and the limited number of homes available for sale due to the steeper mortgage rates owners would face if they sold and purchased a different home.
Working Paper
A quantitative system of monocentric metros
The monocentric city framework is generalized to comprise a system of metros. A "representative" closed metro calibrates parameters and establishes a reservation utility and perimeter land price that must be matched by open metros. The open metros are assumed to have exogenous productivity below and above that in the representative metro. For a given level of productivity, transportation technology proves to be the most important quantitative determinant of population, land area, population density, and house prices across and within metros. Changes in highway capacity primarily affect ...
Journal Article
The affordability of homeownership to middle-income Americans
From 1971 through mid-2007, the nominal national sales price of housing grew almost eightfold. Controlling for inflation, this represented a near doubling in the relative price of housing. The retrenchment in prices that began in 2007 has so far remained small compared to the earlier increase. ; As house prices climbed, many people complained that housing had become unaffordable to middle-income Americans. As early as 1998, newspapers warned that homeownership was becoming a heavy financial burden. As sales price rises accelerated in 2003 and crested in 2006, homeownership was increasingly ...
Journal Article
The Faster Growth of Larger, Less Crowded Locations
Over the past few decades, the population and employment growth of small and large locations in the United States have diverged. Many smaller cities and rural areas saw declining population and employment from 2000 to 2017 as residents and jobs migrated to larger, more prosperous locations. This migration might suggest that the benefits of size, such as business productivity and urban amenities, have become greater over time. However, the migration might also reflect other factors, such as the disproportionate specialization of smaller locations in the declining manufacturing and agriculture ...
Journal Article
The shared fortunes of cities and suburbs
For more than 50 years, suburbs throughout the United States have prospered, while many of the large cities they surround have stagnated. Hence, many people perceive that cities and suburbs tend to grow at each other?s expense?and thus compete for residents and jobs. While there is some truth in this perception, it misses the fact that a metro area?s cities and suburbs also depend on each other for economic growth. Cities and their suburbs share a multitude of resources, such as airports, highways, mass transit, cultural amenities, entertainment venues, air quality, potential employers, and ...
Working Paper
Productivity, congested commuting, and metro size
The monocentric city model is generalized to a fully structural form with leisure in utility, congested commuting, and the equalizing of utility and perimeter land price across metros. Exogenous and agglomerative differences in total factor productivity (TFP) drive differences in metro population, radius, land use, commute time, and home prices. Quantitative results approximate observed correspondences among these outcomes across U.S. metros. Traffic congestion proves the critical force constraining population. Self-driving cars significantly increase the sensitivity of metro population to ...
Working Paper
Monocentric city redux
This paper argues that centralized employment remains an empirically relevant stylization of midsize U.S. metros. It extends the monocentric model to explicitly include leisure as a source of utility but constrains workers to supply fixed labor hours. Doing so sharpens the marginal disutility from longer commutes. The numerical implementation calibrates traffic congestion to tightly match observed commute times in Portland, Oregon. The implied geographic distribution of CBD workers' residence tightly matches that of Portland. The implied population density, land price, and house price ...
Journal Article
The long-term outlook for U.S. residential construction
The recovery of U.S. housing construction paused during the first half of 2013. Stronger growth is likely to resume in the near term. But over the long term, home construction is likely to contract as aging baby boomers downsize.
Working Paper
A bottleneck capital model of development
A convex marginal adjustment cost allows the neoclassical growth model to match observed transition paths for output growth, savings, investment, the real interest rate, and the shadow value of installed capital. Such an adjustment cost need apply only to one of two complementary capital inputs with minimal factor income share. The interaction of complementary capital inputs blurs the distinction between capital accumulation and productivity growth.
Journal Article
Downtown Office Use Has Declined, but Some Metropolitan Areas Are Faring Better than Others
Hybrid working has cut demand for office space, especially in the downtowns of medium and large metropolitan areas. However, the degree of this decline has varied considerably across metropolitan downtowns, with demand remaining solid in many.