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International Economics Seminars

Spatial economics for granular settings

Jonathan Dingel (Chicago Booth), joint with CEP/Geography Urban and Regional Economics Seminar and UB Barcelona

Friday 27 March 2020 13:00 - 14:30


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About this event

We study the application of the "gravity" theoretical framework to empirical settings in which the pattern of economic activity is granular. In settings with fine spatial units or finite samples of the population, individual decision makers are large relative to the economic outcomes of interest. We propose a gravity-based general-equilibrium framework suitable for computing counterfactual outcomes in applications featuring granular commuting matrices. Granularity has consequences for estimates of behavioral responses to commuting costs, the margins of adjustments available to respond to counterfactual changes, and the sensitivity of aggregate outcomes to individual idiosyncrasies.