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 after the bombing. 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 Hiroshima's recovery, and we find an alternative equilibrium without the city center recovery. These results highlight the role of agglomeration forces, multiple equilibria, and expectations in urban dynamics.

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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.