February 19, 2008
Book forum, continued
We just moved our blog platform and none of my posts seem to be going live at the moment, but in a spirit of hope, let me link to the latest from Bryan Caplan on whether racial discrimination means that African-Americans have little incentive to become educated (randomised trial says no incentive, Bryan’s regressions say otherwise) and Kevin Grier, who is discussing my chapter on cities.
Thank you Tim, for your reply to my remarks over at KPC. by the way, I saw you on the Colbert Report. That was comedy gold!
I don’t deny there are spillovers. Glaeser(and you)are convincing. What I was having trouble seeing was how they explained your puzzle that prices were too high relative to wages to be explained by amenites. Now upon reflection, I believe that you are saying there is an extra factor in the demand for living in big cities, viz. getting access to the spillover and that explains why prices are bid up more than wages and amenities would predict. Have I (finally) got it?
I agree that failed cities don’t generate these spillovers anymore for the reasons you describe, but I was asking for a reason why they failed to begin with. I’m saying they must have been generating spillovers at one point to become “great”, and wondering what killed/blocked them? Can an Olsonian “rise and decline of nations” story be told about (some) cities?
Also, it seems if the demand to access the spillovers is what bids up prices then the appropriate policy would be to tax property owners (who are getting the rents generated by the spillover) and subsize firms/workers.
Posted by: Kevin (angus) Grier | February 20th, 2008 at 4:51 pm | Report this comment