David S. Bieri

Booming Bohemia? Evidence from the US High-Technology Industry

This paper assesses the effect of Richard Floridas creative class on economic growth and development at two levels of spatial aggregation. First, I examine the dynamics of economic growth across US metropolitan regions and investigate how they relate to regional specialization and the concentration of talent in the high-tech industry. In addition to evidence of significant high-tech clusters, I identify important complementarities with regard to the interaction between the three Ts of regional development (talent, technology and tolerance) and regional growth dynamics. Using firm-level data, the regional analysis is then complemented by exploring the location of new high-technology plant openings and their relationship with university research and development (R&D) and the creative class. Specifically, I test the hypothesis that both university R&D and the presence of “creativity” generate spillovers which are captured locally in the form of new high-tech establishments, after controlling for important location factors such as local cost, demand and agglomeration economies. While the marginal impacts of increased R&D funding on county probability for new firm formation is modest, the mix of creativity and diversity—as proxied by the Florida measure—appears to be a key driver in the locational choice of new high-tech firms. Separate estimates indicate that these findings hold up across the major high-tech industries in the USA.

Form Follows Function: On the Interaction between Real Estate Finance and Urban Spatial Structure

The fundamental connection between the spatial development of cities and financial markets is a topic that has received little attention from either urbanists or economists. In this short piece, I argue that part of the post-crisis recovery is predicated on a multi-faceted understanding of the subtle causal linkages between financial flows and urban morphologies. Following a historical contextualization of my main argument, I speculate about the key channels through which the dialectical relationship between capital, its regimes of accumulation and its unequal spatial distribution affect the urban fabric. I identify two separate economic processes and historical developments that have co-defined the nexus of real estate finance and urban systems. First, the process of financial globalization and deregulation has been instrumental to the financialization of real estate, and, second, post-Fordist forces of organizational fragmentation have altered the formational principles of core aspects of real estate development processes, including the role of architecture.

Quality of Life, Transportation Costs, and Federal Housing Assistance: Leveling the Playing Field

Abstract Federal housing subsidies are allocated without regard to spatial differences in the cost of living or quality of life. In this article, we calculate housing subsidy payments for participants in the Housing Choice Voucher (HCV) program and demonstrate that these subsidies are significantly related to metropolitan quality-of-life differentials. We then estimate amenity-adjusted subsidies and compare these estimates with data from the U.S. Department of Housing and Urban Development’s Location Affordability Portal. Our analysis yields three insights regarding the relationship between federal housing assistance payments (HAP), metropolitan quality-of-life differentials, and transportation cost burdens. First, HCV HAP show a strong inverse correlation with household transportation expenditures, and this is particularly pronounced for low-income households. Thus, HAP do not address location affordability because those living in high-transportation cost metropolitan areas receive the lowest housing subsidies. Second, we present evidence that HAP are positively related to metropolitan quality-of-life differentials. This suggests that high-amenity metropolitan areas also tend to be the most affordable from a transportation cost perspective. Third, our proposed amenity-adjusted HAP strongly reduce the inverse relationship between HAP and transportation cost burdens.

The Basel Process, Financial Stability, and the Age of Turbulence

The Basel Process is a key element of the global financial system and a critical force that has been shaping the international financial architecture over the last 80 years. As such it plays an important role in co-ordinating the multilateral efforts of central banks, regulators, supervisors and market participants alike and is thus uniquely geared towards fostering and maintaining financial stability. Giving rise to current global financial turbulence, the recent subprime crisis has subjected the Basel Process to intense internal and external scrutiny. This episode of financial instability might yet prove be one of the most challenging tests for the Basel Process as authorities strive to improve their regulatory frameworks in search of incentives for prudent behaviour.

Central Bank Intervention and Risk Premia in Foreign Exchange Markets: Evidence of Daily Effects: Switzerland 1986–1995

Since the Plaza Meeting in September 1985, G-10 central banks have intervened in foreign exchange markets in a manner and scale unprecedented in the post Bretton Woods era. Using official daily data on interventions by the Swiss National Bank, this paper evaluates the effectiveness of these interventions and examines their impact on exchange rate risk premia, as defined by deviations from interest rate parity. My results suggests that intervention (via its effect on the risk premium) may be responsible for the frequently observed failure of foreign exchange market efficiency models and for their poor out-of-sample forecasting performance.

Regulatory space and the flow of funds across the hierarchy of money

This chapter emphasizes the regulatory linkages between the institutional evolution of money, credit and banking and the spatial structure of the flow of funds. The first part of the chapter treats the trajectory of spatial development and the advancement of the monetaryfinancial system as a joint historical process. Adopting an evolutionary perspective, I document how different regulatory regimes shape the international and interregional flow of funds across space. As a whole, the structure of the regulatory system influences in important ways the roles played by the various components of the monetary-financial system (financial instruments, financial markets, monetary and financial intermediaries) in promoting the inter-regional mobility of funds and, by extension, the mobility of funds among the various sectors of the space economy. From the historical origins of modern money to the rise of shadow banking, money and credit are always and everywhere fundamentally hierarchical in nature and all money is credit money, even state money. Recognizing the spatial implications of this hierarchy for real-financial linkages in the United States, the second part of the chapter illustrates how the political economy of such hierarchical regulation creates new geographies of flows of funds – a set of spatial circuits that are characterized by a rapid evolution in bank complexity and the growing importance of ‘murky finance’. Overall, this chapter develops the case that money and finance are non-neutral with regard to space, principally because the institutional arrangements of financial regulation matter for how the spatial economy

Crowdfunding the City: The End of 'Cataclysmic Money'?

By raising money from a large number of people via the internet, crowdfunding offers the promise of a “democratization of finance”. Recently, the crowdfunding of large-scale urban projects appears to have gained traction as a handful of high-profile real estate and infrastructure projects are making headlines around the globe for relying on distributed-network online financing. Instead of their purported promise, this paper argues that large-scale efforts to crowdfund the urban fabric carry all the hallmarks of what Jane Jacobs termed “cataclysmic money”. As such, crowdfunding the city might simply represent the next phase of entrepreneurialism in the financial transformation of urban governance. The main thrust of the argument developed in this paper suggests that it is precisely because of such financialising potential – and the relational importance of money and finance in an urbanised society more generally – that crowd financing might undermine, rather than fortify, the “right to the city” in the sense of Lefebvre. Indeed, the detailed workings of the modern monetary-financial system – from the technical complexity of financial engineering to the institutional architecture of money and the political economy of its regulatory governance – are still insufficiently recognised in much of the public discourse on the social consequences of finance.

The Restless Landscape of Metroburbia

The metropolitan form in the United States (US), a product of egalitarian liberalism, the New Deal, the collapse of the welfare state, and then the rise of neoliberalism, is a landscape of political and economic change that manifests itself in physical and social landscapes. In turn, these landscapes naturalize these political-economic structures. The chalenges of characterizing this changing metropolitan form have prompted a great number of neologisms, including exurbia, edge city, edgeless city, exopolis, boomburb, cosmoburb, nerdistan, technoburb, generica, satellite sprawl, mallcondoville, as well as post-suburbia and metroburbia. The term ‘metroburbia’ emerged in Internet and media usage around 2005 to capture an important dimension of the New Metropolis: the intermixing of office employment and high-end retailing, with residential settings in suburban and exurban areas, along with established dormitory towns and small cities within a metropolitan area that has acquired many of the amenities of a large city. In short, it represents a fragmented and multinodal mixture of employment and residential settings, with a fusion of suburban, exurban, and central-city characteristics.

Amenities, Affordability, and Housing Vouchers

Against the background of an emerging rental affordability crisis, we examine how the standard rule that households should not spend more than 30% of their income on housing expenditures leads to inefficiencies in the context of federal low‐income housing policy. We quantify how the current practice of locally indexing individual rent subsidies in the Housing Choice Voucher (HCV) program regardless of quality‐of‐life conditions implicitly incentivizes recipients to live in high‐amenity areas. We also assess a novel scenario for housing policy reform that adjusts subsidies by the amenity expenditures of low‐income households, permitting national HCV program coverage to increase.

Managing “Cataclysmic Money”: How Financial Regulation Matters for the Future of U.S. Housing Policy

Deep subsidies for residential housing credit constitute one of the most distinguishing features of U.S. housing policy. Since its inception during the Great Depression, this market-based aspect of U.S. housing policy rests on the public provision of liquid secondary markets via government-sponsored enterprises (GSE)—the system’s hallmark hybrid organizations that combine private control and ownership with governmental guarantees. The modern U.S. housing finance system thereby achieves its intended purpose of promoting access to housing credit (particularly among lowand moderate-income households and neighborhoods) by relying on standardized financial instruments—above all, longterm, self-amortizing mortgages. To some, the very fact that central aspects of U.S. housing finance have remained broadly unchanged since the 1930s is reason to argue that the system is being “stuck in a primitive stage” (Shiller, 2014). To others, by contrast, the same traits of the U.S. housing finance complex represent the fountainhead of unbridled financial innovation and deregulation from which has sprung weapons of mass financial destruction, such as, for example, securitized subprime mortgage back securities that have come to represent the smoking gun of the Great Financial Crisis (GFC; e.g., Immergluck, 2011a, 2011b, 2013; Mian & Sufi, 2009).