New evidence from the 1980, 1990, and 2000 Decennial Census of Housing indicates that expenditure shares on housing are constant over time and across U.S. metropolitan statistical areas (MSA). Consistent with this observation, we consider a model in which identical households with Cobb-Douglas...

This paper studies an urban growth model where learning through personal contacts could be more effective in a denser locale, whereas the effectiveness of learning through impersonal means of communications depends principally on the technology of communications rather than on the locale in...

The paper studies the optimal distribution of business and residential land in a circular city. Once the optimum is characterized, we analyze the effect of changes in commuting costs and externality parameters. We also propose policies like labor subsidies, land taxes and zoning restrictions...

Using the framework of Desmet and Rossi-Hansberg (2009), we present a model of spatial takeoff that is calibrated using spatially-disaggregated occupational data for England in c.1710. The model predicts changes in the spatial distribution of agricultural and manufacturing employment which match...

This paper modifies the standard one-sector stochastic growth model in an effort to explain the observed low procyclicality of the aggregate real wage in the US. The modifications include labor market matching with Nash-bargaining of wages and preferences as introduced in the literature by...

We study the role of education as insurance against a bad marriage in light of changing divorce laws during the 1970s. We build and estimate an equilibrium search model with education, marriage/divorce/remarriage, and household labor supply decisions. A key feature of the model is that women...

Why are financial crises associated with a sustained rise in unemployment? We develop a tractable model with frictions in both credit and labor markets to study the aggregate andmicro-level implications of a credit crunch---i.e., a sudden tightening of collateral constraints. When we simulate a...

We develop a life-cycle model of the labor market in which different worker-firm matches have different quality and the assignment of the right workers to the right firms is time consuming because of search and learning frictions. The rate at which workers move between unemployment, employment...

study the efficiency of search equilibrium under decreasing returns to labor in production. Firms can sign long-term contracts with their workers which give them incentives to maximize the joint surplus associated with their relationship. When the firm hires a new worker, the terms of the...

In many search models of the labor market, unemployment insurance (UI) is conveniently interpreted as the value of leisure or home production and is, therefore, treated as a parameter. However, in reality, UI has to be funded through taxation that might be distortionary. In this paper, I analyze...