We provide new theory and evidence on the resilience of the internal city structure after a large shock by analyzing the atomic bombing of Hiroshima. Exploiting newly digitized data, we document that the city structure recovered within five years. Our new dynamic intra-city quantitative model incorporates commuting, forward-looking location choices, durable floor space, migration frictions, agglomeration forces, and heterogeneous location fundamentals. Strong agglomeration forces in our estimated model explain the recovery of Hiroshima?s city center, and we find an alternative equilibrium without its recovery. These results highlight the role of agglomeration forces, multiple equilibria, and expectations in urban dynamics.

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22 July 2026

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Journal of Political Economy 2026

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DOI: 10.1086/743334

https://www.journals.uchicago.edu/doi/10.1086/743334

This Journal article is published under the centre's Urban programme.