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Hidden value: how consumer learning boosts output
Iphones. Ipads. Wikipedia. Google Maps. Yelp. TripAdvisor. New digital devices, applications, and services offer advice and information at every turn. The technology around us changes fast, so we are continually learning how best to use it. This increased pace of learning enhances the satisfaction we gain from what we buy and increases its value to us over time, even though it may cost the same ? or less. However, this effect of consumer learning on value makes inflation and output growth more difficult to measure. As a result, current statistics may be undervaluing household purchasing power ...
The supply and demand of skilled workers in cities and the role of industry composition
The share of high-skilled workers in U.S. cities is positively correlated with city size, and this correlation strengthened between 1980 and 2010. Furthermore, during the same time period, the U.S. economy experienced a significant structural transformation with regard to industrial composition, most notably in the decline of manufacturing and the rise of high-skilled service industries. To decompose and investigate these trends, this paper develops and estimates a spatial equilibrium model with heterogeneous firms and workers that allows for both industry-specific and skill-specific ...