The long-run effect of economic development policy on resident welfare in a perfectly competitive urban economy

Article Abstract:

The long-term impact of economic development policies that encourage additional firm activity on resident welfare is examined through a comparative static analysis of a closed, urban economy with an explicit labor market. The significance of this study is underscored by the increasing interest on such programs as enterprise zones which aim to remove or reduce central city poverty via urban economic growth and revitalization. Analysis shows that these policies do not necessarily increase resident welfare due to the competition for land between firms and households. Nevertheless, findings demonstrate that income transfer do improve resident welfare. It should be noted that these results are based on the assumption that an urban economy is efficient.

Research, Economic policy, Urban economics

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Who's in charge of the central city? The conflict between efficiency and equity in the design of a metropolitan area

Article Abstract:

Numerical simulations are used to show that there typically exist two equilibria, one in which the poor form the voting majority in the central city and the other in which the rich form the majority in the central city. It is shown that there is an efficiency vs. equity trade-off as to which equilibrium is preferred and if the central city contains only poor households, equity favors expanding the central city to include rich households.

United States, Models, Economic aspects, Metropolitan areas, Personal income

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Redlining, the Community Reinvestment Act, and private mortgage insurance

Article Abstract:

The possibility of a mortgage lender discriminating among a locality's inhabitants from different racial and income backgrounds, while processing their applications is examined. The study indicates that lenders may be partial towards applicants from Community Reinvestment Act (CRA)-covered localities if they receive private mortgage insurance (PMI), which may disguise the redlining of low-paid and minority regions.

Investment management, Mortgage insurance

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