Publications
Are Cities Losing Innovation Advantages? Online versus Face-to-face Interactions (with Naqun Huang, Jing Li, and Yanmin Yang) - June 2025
The Economic Journal, Accepted
How did COVID-19 affect the innovation advantages of dense locations? Using data on the universe of U.S. patent applications, we find that the density premium in the production of novel inventions declined by 18.5%-22.9% in 2020-2021 relative to its pre-pandemic level. Smartphone data on local mobility suggest that the drop in the frequency of local interactions can explain a significant portion of this effect. While COVID-19 resulted in a temporary setback in the innovation advantages of dense locations, the role of urban density in facilitating the exchange and recombination of ideas is unlikely to be persistently replaced by online communication.
Lockdowns and Innovation: Evidence from the 1918 Flu Pandemic (with Enrico Berkes, Olivier Deschenes, Jeffrey Lin, Christopher Severen)
The Review of Economics and Statistics, Volume 107, No. 3, May 2025, Pages 853-863
Does social distancing harm innovation? We estimate the effect of non-pharmaceutical interventions (NPIs)—policies that restrict interactions in an attempt to slow the spread of disease—on local invention. We construct a panel of issued patents and NPIs adopted by 50 large US cities during the 1918 flu pandemic. Difference-in-differences estimates show that cities adopting longer NPIs did not experience a decline in patenting during the pandemic relative to short-NPI cities, and recorded higher patenting afterward. Rather than reduce local invention by restricting localized knowledge spillovers, NPIs adopted during the pandemic may have better preserved other inventive factors.
Link to Working paper version, NBER Working Paper 28152
Non-technical summaries by the Philadelphia Fed, Rotman
Technological Waves, Knowledge Diffusion, and Local Growth (with Enrico Berkes and Martí Mestieri)
Journal of Political Economy Macroeconomics, Volume 3, No. 1, March 2025, Pages 75-121
We develop a spatial model of endogenous growth with frictional knowledge diffusion to examine the effect of technological waves—defined as long-term shifts in the importance of specific knowledge fields—on local growth dynamics. We calibrate the model using a new dataset of historical geolocated patents spanning over one hundred years. We find that frictions to idea diffusion across locations and technological fields account for two-thirds of the empirical relationship between exposure to technological waves and local growth in the United States during the twentieth century. Counterfactual experiments suggest that future changes in the technological landscape may have substantial geographical effects.
Link to Working paper version
Previous versions circulated as "Cities and Technological Waves" (CEPR DP16794, 2021) and "Technological Waves and Local Growth"
Non-technical thread on Twitter
Why Didn't the College Premium Rise Everywhere? Employment Protection and On-the-Job Investment in Skills (with Matthias Doepke)
American Economic Journal: Macroeconomics, Volume 16, No. 3, July 2024, Pages 268-309
Why has the college wage premium risen rapidly in the United States since the 1980s, but not in European economies such as Germany? We argue that differences in employment protection can account for much of the gap. We develop a model in which firms and workers make relationship-specific investments in skill accumulation. The incentive to invest is stronger when employment protection creates an expectation of long-lasting matches. We argue that changes in the economic environment have reduced relationship-specific investment for less-educated workers in the United States, but not for better-protected workers in Germany.
Link to Working paper version
Media coverage on Hutchins Roundup, Northwestern Now, Equitable Growth, Washington Post, Rotman Insights Hub, American Economic Association
Income Segregation and the Rise of the Knowledge Economy (with Enrico Berkes)
American Economic Journal: Applied Economics, Volume 15, No. 2, April 2023, Pages 69-102
We analyze the effect of an increase in knowledge-intensive activities on spatial inequality in U.S. cities. We leverage a predetermined network of patent citations to instrument for local innovation trends. Between 1990 and 2010, a one standard deviation increase in patent growth increases income segregation by 0.65 Gini points, corresponding to 0.31 standard deviations of the over-time change in income segregation. This effect mainly arises from the sorting of residents by income, occupation, and education. Local shocks to innovation induce a clustering of knowledge-intensive jobs and residents, amplified by the response of rents and amenities.
Link to Working paper version
Media coverage on The Atlantic, Fast Company, Quartz, Toronto Star, Rotman Insights Hub, UofT News
The Geography of Unconventional Innovation (with Enrico Berkes)
The Economic Journal, Volume 131, Issue 636, May 2021, Pages 1466–1514
Awarded the 2021 Austin Robinson Memorial Prize
Using a newly assembled dataset of U.S. patents, we show that innovation activity is less concentrated in high-density locations than commonly believed. Yet, inventions based on atypical combinations of knowledge are indeed more prevalent in high-density urban centers. To interpret this relation, we propose that informal interactions in densely populated areas help knowledge flows between distant fields, but are less relevant for flows between close fields. We build a model of innovation in a spatial economy that endogenously generates the pattern observed in the data: specialized clusters emerge in low-density areas, whereas high-density locations diversify and produce unconventional ideas.
Link to Working paper version
Media coverage on CityLab
The University's Janus Face: The Innovation-Inequality Nexus (with Richard Florida)
Managerial and Decision Economics, 41, 6, 1097-1112, 2020 (Special Issue on "Managing Campus Entrepreneurship")
The university is a key source of talent and a key driver of innovation and economic growth in a knowledge‐based economy. But, in performing these economic functions, it also contributes to economic and spatial inequality. Our research uses a variety of new data to examine this Janus face of the university in innovation and inequality across U.S. metro areas. We find evidence that the university plays a role in both regional innovation, boosting local patenting and startup companies, and in economic inequality, with higher rates of income and occupational segregation in metros with highly rated universities.
Working papers
More Trade, Less Diffusion: Technology Transfers and the Dynamic Effects of Import Liberalization (with Gustavo de Souza and Martí Mestieri) - June 2025
We show that trade liberalization can reduce technology diffusion. Using Brazilian data, we document that tariff cuts lead to fewer technology transfers from foreign to Brazilian firms and a decline in Brazilian firms’ citations of foreign patents. The most substantial drop in citations occurs among firms located near those receiving technology transfers, largely driven by a reduction in citations to firms that previously transferred technology to Brazil. These findings suggest that lowering import tariffs can slow the diffusion of foreign ideas by reducing technology transfers. In our quantitative model, when Brazilian tariffs fall, foreign firms opt to export their products directly rather than transfer their technology, weakening knowledge diffusion. An optimal subsidy for technology transfers amplifies the welfare gains from trade liberalization by a factor of four.
The Economic Effects of Scientific Shocks (with Matteo Li Bergolis) - Preliminary draft
We combine data on scientific publications from the Web of Science, patent records from the USPTO and balance sheet information on publicly traded companies to measure firm-level response to the greatest scientific discoveries of our time. The publication of a groundbreaking paper is followed by a significant resource reallocation and output increase for responding firms. Measures of profitability are not affected on average, but this fact conceals large heterogeneity across different episodes. To explain these findings, we develop an endogenous growth model in which the returns to R&D investment are subject to information frictions. The model delivers a simple restriction that can be imposed on the data to separate breakthroughs from dead-end scientific discoveries. We test the model’s implications against our data: the empirical results support the idea that initial uncertainty systematically permeates the early stages of a new technology. Nevertheless, we provide suggestive evidence that discoveries that are unprofitable for responding firms can produce positive aggregate effects through dynamic technological spillovers.
Industry Life Cycles in General Equilibrium (with Laurent Cavenaile, Pau Roldan-Blanco, and Tom Schmitz) - Draft coming soon
A Quantitative Model of Income Segregation in a Knowledge Economy (with Enrico Berkes) - Draft coming soon