Canonical analysis of the classical general equilibrium model demonstrates the existence of an open and dense subset of standard economies that possess fully-revealing rational expectations equilibria. This paper shows that the analogous result is not true in urban economies under appropriate...

We model a South African city during Apartheid (in which both schooling and mobility are restricted on the basis of race) and after Apartheid (in which no restrictions are imposed). We first show that the inequality between blacks and whites decreases when Apartheid laws are removed. Indeed,...

We consider a search-matching model in which black workers are discriminated against and the job arrival rates of all workers depend on social networks as well as distance to jobs. Location choices are mainly driven by the racial preferences of households. There are two possible urban...

This paper offers a new theoretical approach to urban squatting, reflecting the view that squatters and formal residents compete for land within a city. The key implication is that squatters "squeeze" the formal market, raising the price paid by formal residents. The squatter organizer ensures...

Black and white families are heterogenous both in income and ability and simultaneously decide where to locate in the city and which school (private or public) to send their children. We show that, in equilibrium, despite the tuition fees imposed by whites, some black pupils may attend the...

This paper explores the formation of cities through labour specialization, gains to trade, a fixed cost for the transportation network, imperfect competition between firms, and the commuting costs of consumers. The model uses a very general setting, allowing a multidimensional location space and...

The Spatial Mismatch Hypothesis (SMH) argues that low-skilled minorities residing in U.S. inner cities experience poor labour-market outcomes because they are disconnected from suburban job opportunities. This assumption gave rise to an abundant empirical literature, which confirmed this...

The aim of this paper is to explore the structure of cities as a function of labor differentiation, gains to trade, a fixed cost for constructing the transportation network, a variable cost of commodity transport, and the commuting costs of consumers. Firms use different types of labor to...

In this paper, we investigate how residential segregation and bad physical access to jobs contribute to urban unemployment in the Paris region. We first survey the general mechanisms according to which residential segregation and spatial mismatch can have adverse labour-market outcomes. We then...

Since the 1950s, there has been a steady decentralization of entry-level jobs towards the suburbs of American cities, while racial minorities — and particularly blacks — have remained in city centres. In this context, the spatial mismatch hypothesis argues that because the residential...