The problem considered is inference in a simple errors-in-variables model where consistent estimation is impossible without introducing additional exact prior information. The probabilistic prior information required for Bayesian analysis is found to be surprisingly light: despite the model's...

Cities exist because of the productivity gains that arise from clustering production and workers, a process called agglomeration. How important is agglomeration for aggregate growth? This paper constructs a dynamic stochastic general equilibrium model of cities and uses it to estimate the effect...