Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/229523 
Year of Publication: 
2020
Series/Report no.: 
CESifo Working Paper No. 8705
Publisher: 
Center for Economic Studies and Ifo Institute (CESifo), Munich
Abstract: 
Since 1980, economic growth in the U.S. has been fastest in its largest cities. We show that a group of skill- and information-intensive service industries are responsible for all of this new urban bias in recent growth. We then propose a simple explanation centered around the interaction of three factors: the disproportionate reliance of these services on information and communication technology (ICT), the precipitous price decline for ICT capital since 1980, and the preexisting comparative advantage of cities in skilled services. Quantitatively, our mechanism accounts for most of the urban biased growth of the U.S. economy in recent decades.
Subjects: 
urban growth
high-skill services
technological change
JEL: 
J31
O33
R11
R12
Document Type: 
Working Paper
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