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COVID and Cities, Thus Far

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Abstract

Key reasons for the existence of cities are the externalities created when people cluster together in close proximity. During the COVID-19 pandemic, such interactions came with health risks and people found other ways to interact. This article documents how cities changed during COVID-19 and considers how the persistence of new ways of interacting, particularly remote work, will shape the development of cities in the future. It first summarizes evidence showing how residential and commercial prices and activity adjusted at different distances from dense city centers during and since the pandemic. The analysis employs a textbook monocentric city model to demonstrate that two adjustments associated with remote work—reduced commuting times and increased housing demand—generate the patterns observed in the data. The authors then consider how these effects might be magnified by changes in urban amenities and agglomeration forces, and what such forces might mean for the future of cities.

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  • Gilles Duranton & Jessie Handbury, 2023. "COVID and Cities, Thus Far," Economic Policy Review, Federal Reserve Bank of New York, vol. 29(2), pages 6-52, October.
    • Handle: RePEc:fip:fednep:97154
    DOI: 10.59576/epr.29.2.6-52
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    Cited by:

    1. Carlo Corradini & Jesse Matheson & Enrico Vanino, 2024. "Neighbourhood labour structure, lockdown policies, and the uneven spread of COVID‐19: within‐city evidence from England," Economica, London School of Economics and Political Science, vol. 91(363), pages 944-979, July.
    2. Gokan,Toshitaka & Kichko,Sergei & Matheson,Jesse A & Thisse,Jacques-François, 2022. "How the rise of teleworking will reshape labor markets and cities?," IDE Discussion Papers 868, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    3. Titman, Sheridan & Zhu, Guozhong, 2024. "City characteristics, land prices and volatility," Journal of Urban Economics, Elsevier, vol. 140(C).

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    More about this item

    Keywords

    cities; COVID; monocentric model; agglomeration effects;
    All these keywords.

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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