The 2008 crash has left all the established economic doctrines - equilibrium models, real business cycles, disequilibria models - in disarray. Part of the problem is due to Smith’s "veil of ignorance": individuals unknowingly pursue society’s interest and, as a result, have no clue as to the macroeconomic effects of their actions: witness the Keynes and Leontief multipliers, the concept of value added, fiat money, Engel’s law and technical progress, to name but a few of the macrofoundations of microeconomics. A good viewpoint to take bearings anew lies in comparing the post-Great Depression institutions with those emerging from Thatcher and Reagan’s economic policies: deregulation, exogenous vs. endoge- nous money, shadow banking vs. Volcker’s Rule. Very simply, the banks, whose lending determined deposits after Roosevelt, and were a public service became private enterprises whose deposits determine lending. These underlay the great moderation preceding 2006, and the subsequent crash.

The Economic Institutions of Capitalism

Book-length study of black, Chinese, and Japanese self-employment in northern cities of the United States, 1880-1940, Self-employment is explained as a product of moral communities resulting from migration networks.

Ethnic Enterprise in America: Business and Welfare Among Chinese, Japanese and Blacks

We propose an integrated framework to discuss the empirical literature on the local determinants of agglomeration effects. We start by presenting the theoretical mechanisms that ground individual and aggregate empirical specifications. We gradually introduce static effects, dynamic effects, and workers' endogenous location choices. We emphasise the impact of local density on productivity but we also consider many other local determinants supported by theory. Empirical issues are then addressed. Most important concerns are about endogeneity at the local and individual levels, the choice of a productivity measure between wage and TFP, and the roles of spatial scale, firms' characteristics, and functional forms. Estimated impacts of local determinants of productivity, employment, and firms' locations choices are surveyed for both developed and developing economies. We finally provide a discussion of attempts to identify and quantify specific agglomeration mechanisms.

https://papers.ssrn.com/sol3/Delivery.cfm/DP10174.pdf?abstractid=2503404&mirid=1&type=2

The Empirics of Agglomeration Economies

Developments in methodologies, agglomeration, and a range of applied issues have characterized recent advances in regional and urban studies. Volume 5 concentrates on these developments while treating traditional subjects such as housing, the costs and benefits of cities, and policy issues beyond regional inequalities. Contributors make a habit of combining theory and empirics in each chapter, guiding research amid a trend in applied economics towards structural and quasi-experimental approaches. Clearly distinguished from the New Economic Geography covered by Volume 4, these articles feature an international approach that positions recent advances within the discipline of economics and society at large. * Editors are recognized as leaders and can attract an international list of contributors* Regional and urban studies interest economists in many subdisciplines, such as labor, development, and public economics* Table of contents combines theoretical and applied subjects, ensuring broad appeal to readers

Handbook of regional and urban economics

Preface 1. Introduction Part I. Basic Theory: 2. Locational choice of the household 3. Equilibrium land use and optimal land use: single household type 4. Equilibrium land use and optimal land use: multiple household types 5. Urban aggregates and city sizes Part II. Extensions With Externalities: 6. Local public goods 7. Neighborhood externalities and traffic congestion 8. External economies, product variety, and city sizes Appendixes References Author index Subject index.

Urban economic theory : land use and city size

Westlund H., Larsson J. P. and Olsson A. R. Start-ups and local entrepreneurial social capital in the municipalities of Sweden, Regional Studies. This paper contains one of the first empirical attempts to investigate the influence of local entrepreneurial social capital (ESC) on start-up propensity. A unique database, including not only total start-ups but also data on start-ups divided into six sectors, is used to study the impact of ESC on start-ups per capita. The results support the hypothesis that social capital, measured both as (1) firm perception of local public attitudes to entrepreneurship and (2) the share of small businesses influences start-up propensity in Swedish municipalities. The findings also support previous results suggesting that social capital has a somewhat stronger influence in rural areas than in urban areas.

Start-ups and Local Entrepreneurial Social Capital in the Municipalities of Sweden

We show that entrepreneurs are co-located within cities. One plausible source of such spatial clustering is local social interactions, where individuals' decisions to become entrepreneurs are influ ...

Local entrepreneurship clusters in cities

We estimate the respective importance of spatial sorting and agglomeration economies in explaining the urban wage premium for workers with different sets of skills. Sorting is the main source of the wage premium. Agglomeration economies are in general small, but are larger for workers with skills associated with non-routine job tasks. They also appear to involve human capital accumulation, as evidenced by the change in the wage of workers moving away from denser regions. For workers with routine jobs, agglomeration economies are virtually non-existent. Our results provide further evidence of spatial density bringing about productivity advantages primarily in contexts when problem-solving and interaction with others are important.

The Sources of the Urban Wage Premium by Worker Skills

The sources of the urban wage premium by worker skills: Spatial sorting or agglomeration economies?

Andersson M., Klaesson J. and Larsson J. P. How local are spatial density externalities? Neighbourhood effects in agglomeration economies, Regional Studies. The geographic scale at which density externalities operate is analysed in this paper. Using geocoded high-resolution data, the analysis is focused on exogenously determined within-city squares (‘neighbourhoods’) of 1 km2. The analysis confirms a city-wide employment density–wage elasticity and an economically significant density–wage elasticity at the neighbourhood level that attenuate sharply with distance. Panel estimates over 20 years suggest a neighbourhood density–wage elasticity of about 3%, while the city-wide elasticity is about 1%. It is argued that the neighbourhood level is more prone to capture learning, e.g. through knowledge and information spillovers. This interpretation is supported by (1) significantly larger neighbourhood elasticities for university educated workers and (2) sharper attenuation with distance of the effect for such wo...

Johan P. Larsson

Papers

Start-ups and Local Entrepreneurial Social Capital in the Municipalities of Sweden

Local entrepreneurship clusters in cities

The Sources of the Urban Wage Premium by Worker Skills

The sources of the urban wage premium by worker skills: Spatial sorting or agglomeration economies?

How Local are Spatial Density Externalities? Neighbourhood Effects in Agglomeration Economies