The Tale of Two Economies: A Comparative Macroeconomic Analysis of Palo Alto and East Palo Alto
Journal of Interesting Economics
Cities in the USA have experienced diverse growth rates and levels of prosperity. Some cities flourish in prosperity, while others suffer economic recession. This study examines why cities have had different outcomes. We investigated three elements: 1) What are the factors that play a role in the shaping of a municipal’s economy? 2) What are the implications of these factors? 3) Which policies promote economic growth and prosperity? This essay aims to offer policy directions for cities that are not performing well. The paper applies a comparative analysis of two nearby cities, a flourishing economy contrasted with a troubled economy. This study is intended to set up a learning model for voters and policy makers in such cities. This study focuses on four major elements that affect economic prosperity: real estate, the police force, the budget allocation, and education. This paper concludes that real estate is the best indicator for a city’s economic prosperity. We offer methods to increase land values through policy initiatives in the three other categories.
Aditya Kotak, Safwan Siddiqi, and Fred Foldvary. "The Tale of Two Economies: A Comparative Macroeconomic Analysis of Palo Alto and East Palo Alto" Journal of Interesting Economics (2015).
This article was originally published in the Journal of Interesting Economics by David Friedman. The article is also available online at this link. This article was included with the permission of the publisher.