We set out an open, monocentric city with residential structures and reflect on how changes to an amenity index affects the city. On the production side, the shock is represented by a productivity improvement and a local wage increase and on the consumption side the shock is represented by an...

We develop a standard search-matching model in which mobility costs are so high that it is too costly for workers to relocate when a change in their employment status occurs. We show that, in equilibrium, wages increase with distance to jobs and commuting costs because firms need to compensate...