Ferdinand Rauch, University of Oxford Website of Ferdinand Rauch: http://www.bnc.ox.ac.uk/about-brasenose/academic-staff/399-dr-ferdinand-rauch Title: Resetting the Urban Network: 117-2012
Abstract: Do locational fundamentals such as coastlines and rivers determine town locations, or can historical events trap towns in unfavorable locations for centuries? We examine the effects on town locations of the collapse of the Western Roman Empire, which temporarily ended urbanization in Britain, but not in France. As urbanization recovered, medieval towns were more often found in Roman-era town locations in France than in Britain, and this difference persists today. The resetting of Britain’s urban network gave it better access to natural navigable waterways when this was important, while many French towns remained without such access. We show that towns without coastal access grew more slowly in both Britain and France from 1200-1800, and calculate that with better coastal access, France’s urban network would have been up to 20-30 percent larger in 1800. and Christian Bayer, University of Bonn Website: http://www.wiwi.uni-bonn.de/bayer/ Titel: Precautionary Savings, Illiquid Assets, and the Aggregate Consequences of Shocks to Household Income Risk Abstract: Households face large income uncertainty that varies substantially over the business cycle. We examine the macroeconomic consequences of these variations in a model with incomplete markets, liquid and illiquid assets, and a nominal rigidity. Heightened uncertainty depresses aggregate demand as households respond by hoarding liquid "paper" assets for precautionary motives, thereby reducing both illiquid physical investment and consumption demand. This translates into output losses, which a central bank can prevent by providing liquidity. We show that the welfare consequences of uncertainty shocks crucially depend on a household's asset position. Households with little human capital but high illiquid wealth lose the most from an uncertainty shock and gain the most from stabilization policy. (paper jointly with Ralph Lütticke, Lien Pham-Dao and Volker Tjaden)