Free mobility has not been thought of as an effective tool to correct over- or underproduction of externalities. In this paper, we establish that foot voting can internalize the cost of negative externalities. Workers have to accept the wage and rent, however high or low they are in equilibrium,...

It has long been known that the city-size distributions are fat tailed, drawing the interest of urban economists. In contrast, not much is known about the distribution of GDP at city level (henceforth referred to as gross metropolitan product, GMP). We build a model of the spatial economy that...

The empirical regularity known as Zipf’s law or the rank-size rule has motivated development of a theoretical literature to explain it. We examine the assumptions on consumer behavior, particularly about their inability to insure against the city-level productivity shocks, implicitly used in...

Zipf's law is one of the best-known empirical regularities of the city-size distribution. There is extensive research on the subject, where each city is treated symmetrically in terms of the cost of transactions with other cities. Recent developments in network theory facilitate the examination...