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Media type:
E-Article
Title:
The billion pound drop: the Blitz and agglomeration economies in London
Contributor:
Dericks, Gerard H;
Koster, Hans R A
Published:
Oxford University Press (OUP), 2021
Published in:
Journal of Economic Geography, 21 (2021) 6, Seite 869-897
Language:
English
DOI:
10.1093/jeg/lbaa022
ISSN:
1468-2710;
1468-2702
Origination:
Footnote:
Description:
<jats:title>Abstract</jats:title>
<jats:p>We exploit locally exogenous variation from the Blitz bombings to quantify the effect of redevelopment frictions and identify agglomeration economies at a micro-geographic scale. Employing rich location and office rental transaction data, we estimate reduced-form analyses and a spatial general equilibrium model. Our analyses demonstrate that more heavily bombed areas exhibit taller buildings today, and that agglomeration elasticities in London are large, approaching 0.2. Counterfactual simulations show that if the Blitz had not occurred, the concomitant reduction in agglomeration economies arising from the loss of higher-density redevelopment would cause London’s present-day gross domestic product to drop by some 10% (or £50 billion).</jats:p>