Spatial Hysteresis by Mike Elsby

Join us for this weeks Macroeconomics Research Seminar, Autumn Term 2022.

Professor Mike Elsby from the University of Edinburgh will present this weeks Macroeconomics seminar.

Abstract

We study the role of mobility costs in the persistence of labor market outcomes across space. We provide an analytical characterization of the aggregate dynamics of a canonical model with a homogeneous mobility cost. When calibrated to mobility flows, spatial disparities, and local labor demand and supply elasticities, the model underpredicts spatial persistence, and misses the pattern of mobility across space. We then study the role of heterogeneity in mobility costs in resolving these tensions. A key contribution is that we are able to characterize analytically the model with heterogeneous costs. Thus extended, the model captures spatial persistence, the presence of churn in growing locations, history-dependence in spatial disparities, and a nuanced form of equilibrium segregation whereby locations further down the hierarchy become increasingly comprised by similar (immobile) types.

This seminar will be held on campus in the Economics Common Room at 4pm on Tuesday 13 December. This event is open to all levels of study and is also open to the public. To register your place, please contact the seminar organisers.

This event is part of the Macroeconomics Research Seminar Series.