Working Paper: CEPR ID: DP7432
Authors: Gianmarco Ireo; Paolo Ottaviano; Giovanni Prarolo
Abstract: We study how the city system is affected by the possibility for the members of the same cultural diaspora to interact across different cities. In so doing, we propose a simple two-city model with two mobile cultural groups. A localized externality fosters the productivity of individuals when groups interact in a city. At the same time, such interaction dilutes cultural identities and reduces the consumption of culture-specific goods and services. We show that the two groups segregate in different cities when diaspora members find it hard to communicate at distance whereas they integrate in multicultural cities when communication is easy. The model generates situations in which segregation is an equilibrium but is Pareto dominated by integration.
Keywords: cosmopolitan cities; cultural diaspora; cultural identity; knowledge creation
JEL Codes: F0; O4; R1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| communication ease (L96) | cultural integration (F15) |
| communication barriers (L96) | cultural segregation (R23) |
| cultural interaction (Z19) | productivity (O49) |
| cultural integration (F15) | overall productivity (O49) |
| cultural segregation (R23) | overall productivity (O49) |