1. In an open system of cities where firms and households can move to the suburbs of the same metropolitan area or move across cities (i.e Manhattan to Chicago), can a liberal mayor redistribute income without the city suffering a capital drain as the 1% and footloose jobs run to alternative locations?
The answer hinges on several deep parameters. First, in product space --- is the city in question a unique city that has few close substitutes? If the answer is "yes", then the mayor will be more likely to achieve his redistribution goals with less of an economic loss for the city. Second, do the people who will be taxed more to achieve liberal goals such as universal pre-K and ending "stop and frisk" --- feel that they gain from such new policies? Do Manhattan's 1% have an altruistic side? Do they value other people's civil rights? If the answer is "yes", then the new mayor will be able to achieve his goals without macro growth consequences for his city.
2. Will NYC's overall quality of life suffer because of new liberal policies? If the new mayor plays nice with the municipal unions, how much will the city's deficit increase by? Who will pay the taxes to finance these pay increases? If other services are cut because the unions play hardball with Del Blasio, how much does the city suffer? For example, will garbage be picked up less often? Was "stop and frisk" an important reason that NYC's crime fell over the last 20 years? Will crime in the city increase if the cops change their tactics?
3. If a mayor pursues a new progressive policy such as universal pre-K, is this redistribution or in the medium term will such a policy boost the city's quality of life and the quality of its workforce? If the latter is true, then why don't more conservative mayors pursue this strategy? Are they too impatient?
4. Firms are forward looking. If firms expect that the new mayor isn't business friendly, will firms who were thinking of moving to NYC move elsewhere?
5. Other mayors are strategic. For small cities (think of Yonkers) close to Manhattan, will their mayors now aggressively court businesses to attract them so that they offer access to New York City while avoiding the political constraints that businesses that are physically located there face?
6. Relative to other cities, will NYC real estate prices start to fall? Urban economists argue that land owners are the residual claimants on good news and bad news for city quality of life and productivity. NYC real estate was cheap in the 1970s and early 1980s when the city was in big trouble. How will this interest group use its clout to nudge the mayor to pursue policies that are in its interest?
7. What performance criteria do you use to judge whether a mayor has done a "good job"? Economists would say that you need a control group. What would Manhattan be like in the year 2018 if Quinn had been mayor? Since she is not mayor, this is a hard question to answer but without such a counter-factual, how will judge whether the new mayor should be re-elected?