. First, we explore the role of commuting for local labor markets and their capacity to absorb productivity shocks. Second, we … address the role of housing markets for quantitative analyses. Germany is an exciting laboratory because commuting across …

This paper uses the quantitative spatial model with heterogeneous locations linked by costly goods trade, migration and … commuting developed in Monte et al. (2018) to address the workings of local labor markets in Germany. One key contribution … commuting measures have very little predictive power for these general equilibrium elasticities when the housing share is small …

distributional implications. Based on a general equilibrium model with input and output distortions and migration, we show that the … exercises show that reducing the within-prefecture misallocation increases the aggregate welfare, discourages migration towards … large cities, and narrows the spatial inequality. Moreover, internal migration alleviates the impacts of micro-frictions on …