On December 13th the second edition of the workshop on “Urban development, agglomeration and economic growth” was held at the Bank of Italy. The workshop hinged upon the presentation of a set of results on the mechanisms of urban agglomeration and the link to economic growth, within the Bank of Italy's research project on "Urban development, agglomeration and economic growth".
The workshop mainly focused on preliminary evidence on i) the analysis of wage, productivity and innovativeness premium of urban workers and firms with respect to non urban ones, and on ii) the relation between the dynamics of real estate prices and credit access on the one hand and the elasticity of real estate supply on the other one.
Urban firms pay a wage premium with respect to non urban ones for given observable and unobservable characteristics of the workers, display higher level of labor productivity and a higher propensity to patent their innovations. Moreover we show that the elasticity of housing supply is an important determinant of local growth, in that differences in the elasticity of housing supply determine the extent to which a demand shock translates into higher economic growth or more expensive houses.
The research project will be finalized by Spring 2017. The conference program is available here.
