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The City as a Small Open Economy

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  • John Hartwick

Abstract

We set out a small, open economy model of a city, one with local housing, government production and a non-traded good. We observe that a positive shift in labor productivity in the export sector generally results in a larger, higher-wage and more densely settled city. Production of the local public good increases for the special case of the public good 'counting' small in the utility function of the representative resident. Similar results obtain for the case of a city experiencing an exogenous improvement in a local climate amenity.

Suggested Citation

  • John Hartwick, 2014. "The City as a Small Open Economy," ERSA conference papers ersa14p29, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa14p29
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    File URL: https://www-sre.wu.ac.at/ersa/ersaconfs/ersa14/e140826aFinal00029.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    small open city; urban public sector; law of urban growth.;
    All these keywords.

    JEL classification:

    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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