Seminar by David Nagy

SALA SEMINARI – 1° PIANO, PALAZZO LEVI CASES, VIA DEL SANTO 33 - ORE 12.30

04.12.2018

Seminar by David Nagy, Centre de Recerca en Economia Internacional, Barcelona.

 Title:  “Trade and urbanization: Evidence from Hungary” , David K. Nagy 

Abstract: I study how trade affects urbanization and welfare. To guide my investigation, I first develop a quantitative model of economic geography in which benefits from trading drive agglomeration around locations where trading activity takes place. As a result, increasing trade leads to urbanization and welfare gains. The model provides a simple formula according to which the degree of urbanization around trading locations is a sufficient statistic for the real income gains from trade. Next, I estimate the model using exogenous variation in trade due to the redrawing of Hungary’s borders after the First World War. Besides explaining the decrease in urbanization near the country’s new borders, the model also provides a tool to measure real income losses at any location, which are unobserved in the data. I find that the effects of the new borders on urbanization and real income are substantially heterogeneous across locations, due to the rich geography of frictions to trade and labor mobility.