Kohei Takeda

I study various topics in trade and urban economics. My research explores the redistributive effects of economic policies and shocks across space and time, and therefore, my research interests extend to the intersection of international trade, economic geography, and labour economics.

"The Geography of Structural Transformation: Effects on Inequality and Mobility"

Abstract: Economies transform at an uneven pace: San Jose's meteoric rise coexists with Detroit's slow decline. The interplay between structural transformation in the aggregate and local economies is key to understanding spatial inequality and worker mobility. This paper develops a dynamic overlapping generations model of economic geography where historical exposure to different industries creates persistence in occupational structure, and non-homothetic preferences and differential productivity growth lead to different rates of structural transformation. Despite the heterogeneity across locations, sectors, and time, the model remains tractable and is calibrated to match metropolitan area data for the U.S. economy from 1980 to 2010. The calibration allows us to back out measures of upward mobility and inequality, thereby providing theoretical underpinnings to the Gatsby Curve. The counterfactual analysis shows that structural transformation has substantial effects on mobility.

[Manuscript - December 2023] [Online Appendix] [Web-based Supplementary Material (numerical results)] [Revised version of CEP discussion paper #1893] [USAPP blog post]

"The Economic Dynamics of City Structure: Evidence from Hiroshima's Recovery" with Atsushi Yamagishi
[Revision requested by the JOURNAL OF POLITICAL ECONOMY]

Abstract: We provide new theory and evidence on the resilience of internal city structure after a large shock, analyzing the atomic bombing of Hiroshima. Exploiting newly digitized data, we document that the city structure recovered within five years after the bombing. Our new dynamic quantitative model of internal city structure incorporates commuting, forward-looking location choices, migration frictions, agglomeration forces, and heterogeneous location fundamentals. Strong agglomeration forces in our estimated model explain Hiroshima's recovery, and we find an alternative equilibrium where the city center did not recover. These results highlight the role of agglomeration forces, multiple equilibria, and expectations in urban dynamics.

CURRENT VERSION APRIL 2024

[Manuscript - April 2024 (CEP discussion paper #1988)] [Online Appendix] [Presentation slides] [Slides with no equations] [Previous version with other results is here] [Toyo Keizai (東洋経済) Column by Atsushi] [podcast - Densely speaking]

"How Useful are Quantitative Urban Models for Cities in Developing Countries?" with Daniel Sturm and Tony Venables

Abstract: Most of the world’s urban population lives in cities in developing countries where data from traditional sources is often scarce. In this paper we show how quantitative urban models can be estimated in such data-scarce environments using data from Dhaka. Building on recent work estimating commuting costs using increasingly available mobile phone data together with Google travel times, we show how mobile phone data can be combined with newly available satellite data on building heights to estimate the key structural parameters of an urban model. We use the model to estimate the prices of land and floor space in each ward of Dhaka, which are typically very difficult to directly observe in developing country cities. To illustrate how the model is useful for policy analysis we consider model counterfactuals of the impact of an increase in density, which we model as an increase in the floor space supply elasticity and the construction of a new radial road.

(new version coming soon) [Manuscript - August 2023]

"Trade and Intergenerational Income Mobility: Theory and Evidence from the US" with Italo Colantone and Gianmarco I.P. Ottaviano

Abstract: This paper studies the impact of globalization on intergenerational income mobility. Exploiting U.S. data, we show that stronger trade exposure at the commuting zone level lowers the intergenerational income mobility of residents. In particular, higher exposure to Chinese import competition between 1991 and 2007 lowers the income mobility of the cohort of U.S. workers born in 1980--1982, as evaluated based on their income in 2011--2012. We present a general equilibrium theory in which path dependence in sector choice of individuals over generations and mobility frictions determine the dynamics of industrial compositions across locations in a country. Import competition reduces intergenerational income mobility through the interaction of lower wage growth and less opportunities to change jobs and locations in the country. The numerical solutions of the theory show that workers from locations with relatively high exposure to a trade shock exhibit lower intergenerational income mobility, consistent with the empirical findings on the U.S.

NEW VERSION OCTOBER 2024

[Manuscript - October 2024] [Presentation slides]

"Exploring the Urban Model: Employment, Housing, and Infrastructure" with Daniel Sturm and Tony Venables

Abstract: This paper explores the properties of a modern urban model in which households’ and firms’ locations in the city are endogenously determined as functions of technology, preferences, and geography.  This class of model provides insights into the factors that determine the shape and growth of cities. The paper increases understanding by studying the comparative static properties of the model, the effects of various policy interventions, and circumstances under which different possible city types (mono- vs. poly-centric) arise.  It is a step to tailoring model structure to adequately describe real world cities of different sizes and types.

(new version coming soon) [Manuscript - December 2021] [World Bank WP #9910 (January 2022)]

"Highways, High-Speed railways, and Urban Growth: Evidence from Japan 1970 - 2015" with Tomoya Mori

Abstract: This paper studies the impact of high-speed transport networks on urban growth at both the national and individual city scales and provides the first systematic evidence for theoretical implications from the extant endogenous agglomeration models in a many-region setup. An improvement of interregional transport access induces agglomeration at the global scale (only a subset of cities grow by absorbing population from the rest), and dispersion at the local scale (decentralization proceeds in each city). To establish causality, we exploit the variation in network centralities, closeness and betweenness, of the transport network, which reflect the average accessibility and the role of intermediary of each node, respectively. Using Japanese data, two key results are obtained: (i) an improvement in betweenness is localized and induces city growth; (ii) that changes in closeness are ubiquitous, and their effects on city growth are averaged out, while promoting decentralization in each city. Together, they underscore that the explicit distinction between ubiquitous and localized gains from transport development narrows down the multiplicity of equilibria, hence the selection of cities to grow, and disentangles the urban growth process at different spatial scales. Furthermore, we report contrasting responses to the transport development by different industries and research activities.

[Manuscript - January 2019]

"On Spatial Inequality in a City"

Abstract: What determines the segregation of households and the geographical distribution of production in a city? This paper develops a spatial equilibrium model of an urban system with heterogeneous agents and endogenous commuting. Nonhomothetic preference in consumption and heterogeneity of workers in production leads to both residential and workplace sorting. The model, therefore, can derive the uneven distribution of income across locations within a city associated with the difference in amenities. We show how the model can be used to evaluate the heterogeneous impacts of the relevant place-based policies, including the improvement of infrastructure and gentrification.

(manuscript available upon request)

Selected Comments and Discussions:

• “Sorting to Expensive Cities“ by Cecile Gaubert and Frederic Robert-Nicoud, 2023 CEPR CURE, Torino [slides]

• “Identifying Agglomeration Shadows: Long-run Evidence from Ancient Ports“ by Richard Hornbeck, Guy Michaels and Ferdinand Rauch, 2023 UEA EU meeting, Milano [slides]

• “Market size, trade and productivity reconsidered: Poverty traps and the home market“ by Marcus Berliant and Takatoshi Tabuchi, 2023 UEA NA meeting, Toronto [slides]

• “The Dual Local Markets: Family, Jobs, and the Spatial Distribution of Skills“ by Jingting Fan and Ben Zou, 2024 ABFER meeting, Singapore [slides]