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Working Paper
Measuring R & D spillovers : on the importance of geographic and technological proximity
Evidence is presented which suggest that an important measure of the apparent geographic localization of R&D spillovers may be an artifact of industrial agglomeration. A production function framework is used to examine the role of geographic and technological proximity for inter-firm spillovers from R&D. The largest spillovers are found to flow between firms in the same industry. However, spillovers within narrowly defined technological groups do not appear to be attenuated by distance. Geographic proximity does appear to attenuate spillovers that cross narrowly defined technological ...
Working Paper
Household Financial Distress and the Burden of ‘Aggregate’ Shocks
In this paper we show that household-level financial distress (FD) varies greatly and can increase vulnerability to economic shocks. To do this, we establish three facts: (i) regions in the United States vary significantly in their “FD-intensity,” measured either by how much additional credit households can access or how delinquent they are on debts, (ii) shocks that are typically viewed as “aggregate” in nature hit geographic areas quite differently, and (iii) FD is an economic “pre-existing condition”: the share of an aggregate shock borne by a region is positively correlated ...
Working Paper
Household Financial Distress and the Burden of 'Aggregate' Shocks
The goal of this paper is to show that household-level financial distress (FD) varies greatly, meaning there is unequal exposure to macroeconomic risk, and that FD can increase macroeconomic vulnerability. To do this, we first establish three facts: (i) regions in the U.S. vary significantly in their "FD-intensity," measured either by how much additional credit households therein can access, or in how delinquent they typically are on debts, (ii) shocks that are typically viewed as "aggregate" in nature hit geographic areas quite differently, and (iii) FD is an economic "pre-existing ...
Working Paper
Institutions Do Not Rule: Reassessing the Driving Forces of Economic Development
The pursuit to uncover the driving forces behind cross-country income gaps has divided economists into two major camps: One emphasizes institutions, while the other stresses non-institutional forces such as geography. Each school of thought has its own theoretical foundation and empirical support, but they share an implicit hypothesis?the forces driving economic development remain the same regardless of a country?s stage of development. Such hypothesis implies a theory that the process of development in human history is a continuous improvement in income levels, driven by the same forces, and ...
Working Paper
Australian growth: a California perspective
Examination of special cases assists understanding of the mechanics of long-run economic growth more generally. Australia and California are two economies having the rare distinction of achieving 150 years of sustained high and rising living standards for rapidly expanding populations. They are suitable comparators since in some respects they are quite similar, especially in their initial conditions in the mid-19th century, their legal and cultural inheritances, and with respect to some long-term performance indicators. However, their growth trajectories have differed markedly in some ...
Working Paper
Portage and path dependence
The authors examine portage sites in the U.S. South, Mid-Atlantic, and Midwest, including those on the fall line, a geomorphological feature in the southeastern U.S. marking the final rapids on rivers before the ocean. Historically, waterborne transport of goods required portage around the falls at these points, while some falls provided water power during early industrialization. These factors attracted commerce and manufacturing. Although these original advantages have long since been made obsolete, the authors document the continuing importance of these portage sites over time. They ...
Working Paper
The geography of research and development activity in the U.S.
This study details the location patterns of R&D labs in the U.S., but it differs from past studies in a number of ways. First, rather than looking at the geographic concentration of manufacturing firms (e.g., Ellison and Glaeser, 1997; Rosenthal and Strange, 2001; and Duranton and Overman, 2005), the authors consider the spatial concentration of private R&D activity. Second, rather than focusing on the concentration of employment in a given industry, the authors look at the clustering of individual R&D labs by industry. Third, following Duranton and Overman (2005), the authors look for ...
Working Paper
On the importance of geographic and technological proximity for R&D spillovers : an empirical investigation
Empirical studies of the external effects of R&D suggest that both geographic and technological distance attenuate inter-firm spillovers from innovative activity. The results presented here indicate that the tendency for R&D spillovers to localize economic activity is conditional on the technological relation between spillover generating and receiving firms. The production function framework is generalized to control for correlation between measures of geographic and technological proximity. Coefficient estimates confirm that R&D spillovers are largest among technological neighbors. However, ...
Working Paper
Estimating Border Effects: The Impact of Spatial Aggregation
Trade data are typically reported at the level of regions or countries and are therefore aggregates across space. In this paper, we investigate the sensitivity of standard gravity estimation to spatial aggregation. We build a model in which symmetric micro regions are aggregated into macro regions. We then apply the model to the large literature on border effects in domestic and international trade. Our theory shows that aggregation leads to border effect heterogeneity. Larger regions or countries are systematically associated with smaller border effects. The reason is that due to spatial ...
Speech
Welcoming Remarks, Book Launch: Shared Prosperity in America’s Communities
President Patrick T. Harker provides opening remarks at the book launch for Shared Prosperity in America?s Communities, a collection of essays coedited by the Philadelphia Fed?s Community Development Studies & Education Department and the University of Pennsylvania?s Penn Institute for Urban Research. He highlights the importance of engaging in research on inequality and social mobility to promote economic growth.