Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
We develop a multisector general equilibrium model of a system of cities to examine the quantitative significance of the industrial structure in determining the spatial structure. We identify three types of wedges: the efficiency wedge, the labor wedge, and amenity, which capture the extent to which the standard urban economics model fails to explain the observed characteristics empirically. We then calibrate the model to Japanese regional data and conduct counterfactual exercises to identify the significance of each wedge in each sector. We show that the labor wedge, which represents various labor market distortions, plays a primary role in determining the spatial structure and that the secondary sector is the most influential.