Models of Urban Growth Flashcards
income multiplier
increase of total income for every unit of export income gained
employment multiplier
quantitiy of jobs born for every new job in the export sector
labor demand curve
what’s shifting the curve to the right ?
downward sloping line
1)export demand increase
2)worker productivity increase
labor demand curve
whats shifting the curve to the left?
downward sloping line
3) corporate and industrial tax increase
4) land use policy limiting the space for industry
what will people drive away moving into the city?
residential taxes
labor supply curve
what will make people draw into the city, leading the shift the curve to the right ?
1 monetary reason, 2 non-monetary reason
rises as wage climb so upward sloping line
1) higher wages
2) environmental quality
3) public services
the Role of Public Policy in Economic Growth
in which way can the government influence economic growth ?
through 1) subsidies
2) mananging urban challenges like environmental quality
3) public transportation
Name 4 Subsidy programs and explain them shortly
1) tax abatment/reduce (for new firms for some period of time)
2) industrial bonds (tax-free industrial bonds to finance property development)
3) government loans (to developers)
4) site development/Standortentwicklung (purchase land, clear it, build a road & sewer and then sell it to a developer for a fraction of the cost)
name disadvantages from subsidies
lowering tax revenues could worsen public services
evidence that tax cuts + less public spendings lead to economic shrink
but tax cuts+ more public spending leading to economic growth
what could be another incentive for subsidy progams?
lower tax burden will attract firms, increasing the tax revenues again on the long run so larger basis for public spendings
benefits of economic growth
wages rise, more jobs created, variety of goods and services grows
costs of economic growth
pollution, congestion, crime
who benefits from econmic growth?
less educated worker, younger individuals and afro-americans + the city’s original residents, eöspecially the unemployed
but also boostering average income of the city as increased
employmengt raises wages, offers promotions & lowers unemploymentrates
what is the primary driver of employment changes?
Business expansions and opening
closures play a smaller roll
which role are legislation for business closures playing?
second the disadvantage
gives workers the opportunity to look for alternatives bc the laws require businesses to give advanced notice before closing or to pay severance
add a layer of complexity, potentially discouraging businesses from
hiring or offering competitve wages
alternative strategies for regulators when businesses facing production issues
1) improving production efficiency
2) attracting new industries
3) subsidizes training and retraining for the change in labor conditions
which 2 methos exist for forecasting economic growth?
1) economic base study
2) input-output analysis
explain the economic base study
what is its purpose
assumption that a city’s export industries are the foundation. 1. step estimate location quotient, 2. step estimate employment multiplier
estimate the increase of total employment by the increase of export empl
explain input-output analysis
derives a multiplier for each industry
generates a complete acocunting of the transactions between firms& households // calculates input coefficient to show the proportion of inputs needed to produce one dollar of output
used to estimate the multiplier effects
does not use location quotient, measures the exports directly
what are the limits of the economic base study and input-output analysis?
1) constant multipliers
2) constant wages
3) outsiders determining the city’s fade
4) focus on exports
whats the limitation of the location quotient
1) uniform consumtion patterns
2) national self-sufficiency
3) industry grouping
