• https://doi.org/10.1080/17421772.2025.2590663Copy DOI Icon

Chaotic cities

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Abstract

ABSTRACT This paper proposes a stylised low-dimensional intertemporal model to explain location dynamics in a city. Two independent problems are approached: (i) households choose where to inhabit by confronting the value of residential amenities against congestion externalities; (ii) workers decide where to pursue their professional careers by evaluating workplace amenities and knowledge spillovers. While the job option is apparently unequivocal (both drivers point to the progressive concentration of workers), the residential choice involves conflicting forces that might generate unconventional long-term outcomes (namely, endogenous fluctuations that perpetuate systematic household relocation). The two problems are merged through the key role of commuting costs.

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