Saturday, December 22, 2012

Who Can Take a Punch?

This NY Fed piece provides several case studies of employment dynamics in areas that experienced significant natural disaster shocks (h/t to Mark Thoma).  Based on these cases, the economists are optimistic about the NY Region's post-Sandy employment dynamics.  The event studies they present resemble the Blanchard and Katz state/year employment dynamics in their seminal Regional Evolutions work.   Within a system of cities, we have many choices over where we live our lives and invest. This menu of choices provides us with implicit insurance against shocks and incentivizes geographical areas such as coastal cities to think about investing in resiliency so that brain drain through out migration does not take place.  This is "small ball adaptation" through competitive markets rather than through a federal government Manhattan Project.   In my ongoing migration work with Boustan and Rhode, we are exploring how migrants respond to disaster shocks.

Switching subjects, I was working at Stanford Univ. yesterday.  It is paradise.