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Cities and Growth with Gilles Duranton and Diego Puga

Economics Detective Radio

CHAPTER

How to Model Asset Markets in a Simple Way

Rising housing costs for you increase the value of your most valuable asset whereas rising housing costs for a renter just it's just pure pure cost. We try to model with this tension between the incumbent occupants and the newcomers or the potential when newcomers to those highly productive places in the simplest possible way. In reality indeed there's an asset market which is pretty complicated but trying to trying to model a dynamic asset markets given that all cities are different so far from all sorts of shocks and stuff would have been overwhelmingSo we tried we tried to model that in a simple way being completely aware that indeed this this move forward to the story including especially with an asset market.

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