We provide new theory and evidence on the resilience of internal city structure after a large shock, analyzing the atomic bombing of Hiroshima. Exploiting newly digitized data, we document that the city structure recovered within five years after the bombing. Our new dynamic quantitative model of internal city structure incorporates commuting, forward-looking location choices, migration frictions, agglomeration forces, and heterogeneous location fundamentals. Strong agglomeration forces in our estimated model explain Hiroshima's recovery, and we find an alternative equilibrium where the city center did not recover. These results highlight the role of agglomeration forces, multiple equilibria, and expectations in urban dynamics.

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Kohei Takeda and Atsushi Yamagishi

12 April 2024     Paper Number CEPDP1988

Download PDF - The economic dynamics of city structure: Evidence from Hiroshima's recovery

This CEP discussion paper is published under the centre's Urban programme.