Seminar: A dynamic theory of the urban network

We propose a dynamic model of the urban network based on locational advantage and frictional labor mobility. Despite CRS production and matching technologies, and uniform underlying distribution of production factors, the steady-state equilibrium replicates key features of the spatial economy: (i) highly skewed city size distribution, mirrored in migration flows; (ii) sorting of more productive workers and firms into larger cities; (iii) higher positive assortative matching between employees and employers in larger cities. Joint work with Modibo Sidibe.