Tuesday, May 30, 2017

Not the sandbox

John Cochrane talking about research on zoning restrictions:

Hsieh and Moretti:
...high productivity cities like New York and the San Francisco Bay Area have adopted stringent re- strictions to new housing supply, effectively limiting the number of workers who have access to such high productivity. Using a spatial equilibrium model and data from 220 metropolitan areas we find that these constraints lowered aggregate US growth by more than 50% from 1964 to 2009.

Take Silicon alley, who wants to pay he high prices?  So growth is limited due to housing restrictions.  
But the sandbox is being constructed everywhere, and its developers dispersed globally. Yet the sandbox is the biggest productivity boost since electricity. 

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