Must-Read: Nick Rowe: Anti Urban Economics

Must-Read: Smart theoretical point about agglomeration. Situations in which we have strategic complementarity and negative externality are prisoners’ dilemmas. But is there reason to think that such situations are in any sense typical in the case of human agglomeration? Isn’t the natural presumption otherwise?

Nick Rowe: Anti Urban Economics:

I’m just throwing this out there. Read at your own risk…

I don’t know what I’m talking about (even more than usual). I’m just thinking out loud, and being ornery. I will explain where I’m coming from after I’ve made my point. There’s a difference between “strategic complementarity” and “positive externalities”. Strategic complementarity is what creates cities. But cities don’t necessarily create positive externalities. “Network externalities” is a bit of a BS term that conflates two conceptually distinct things…