PUBLICATIONS Archives - Coen Teulings

The urban economics of retail

Ioulia V. Ossokina , Jan Svitak , Coen N. Teulings

Regional Science and Urban Economics, 2024,104026

https://doi.org/10.1016/j.regsciurbeco.2024.104026

Abstract: Using property-level data from 327 larger shopping areas in the Netherlands, we show that the spatial structure of a shopping area resembles a monocentric city in miniature. Just like a monocentric city, a shopping area has a pronounced centre where the rents are the highest and the vacancy the lowest, and a negative retail rent gradient from this centre to the edges. The average retail rent gradient is −17% per 100 m distance, and the vacancy is one and a half times higher at the edge than in the centre. Our model gives insights into how shopping areas respond to downfall in demand, both in the short and long run. Our data, covering the Great Recession, from 2009 to 2012, lend support to these predictions.
Keywords: Land market competition; Retail; Rent gradient; Vacancy; Transformation

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Irreversible investment under predictable growth: Why land stays vacant when housing demand is booming

Rutger-Jan Lange, Coen N. Teulings

Journal of Economic Theory, Volume 215, 2024 https://doi.org/10.1016/j.jet.2023.105776

Abstract: The standard model of irreversible investment under uncertainty considers only the level of the cash flow that could be obtained through the investment. We present a general model that includes as state variables both the level and the growth rate of the cash flow, while the timing and size of the one-time investment are discretionary. As an illustration, we consider an investor with the exclusive right to develop a vacant piece of land, where the timing of the investment and the scale of the property are chosen optimally. We demonstrate that construction is optimally postponed when prospects are gloomy, but also when they are bright. Indeed, under sufficiently high growth it is, perversely, never optimal to invest. Under a cost-of-capital argument, the rational response to predictable growth combined with flexible investment conditions is to keep land vacant for extended periods, which may explain why construction in superstar cities often appears sluggish. Our proposed model can be used in all investment decisions, irrespective of sector, where the assumptions of predictable growth and a one-off, flexible but otherwise irreversible investment are met.
Keywords: Optimal stopping; Real options; Irreversible investment; Real estate; Urban growth

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Monopolistic price-setting behavior of information technology firms

E. L. van ‘t Klooster & C. N. Teulings (2023) Economics of Innovation and New Technology, 1-19. doi: 10.1080/10438599.2023.2194641

ABSTRACT

Markups, which are when prices are greater than the marginal cost of production, have increased in the USA over the last decades. Our paper explores the differences in markups between Information Technology (IT) and non-IT firms. By doing so, we contribute to the understanding of the role of the IT industry in the increase in markups. We extend to De Loecker, Eeckhout, and Unger (2020), who find that markups of publicly traded firms have risen since 1980. They argue that no industry has systematically higher markups. We develop a novel firm-level classification method using natural language processing (NLP) to distinguish IT from non-IT firms. Our approach differs from the commonly used North American Industry Classification System (NAICS). Using our classification, we find that the increase in markup in the period since 1980 occurred in two separate episodes. In the first, from 1980 until 1996, firms recovered from the fall of markups in the 1970s. In the second episode, since 1996, markups of IT firms diverge enormously. Markups of IT firms surge from 47% in 1996 to 80% in 2018, while the markup of non-IT firms remains largely unchanged.

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Returns to on-the-job search and wage dispersion

Axel Gottfries, Coen Teulings

Labour Economics 80 (2023) 102292, ISSN 0927-5371

https://doi.org/10.1016/j.labeco.2022.102292

Abstract

A wide class of models with On-the-Job Search (OJS) predict that workers gradually select into better jobs. We develop a simple method based on the expected number of job offers received that can be used to measure match quality, identify the wage offer distribution and estimate the contribution of OJS to wage dispersion and the increase in wages over the lifecycle. The method uses two sources of identification: (i) time variation in job- finding rates and (ii) individual variation in the time since the last layoff. Applying this method to the NLSY 79, we find that the standard deviation of the wage-offer distribution is 13% and that OJS accounts for 8% of the total wage dispersion and 30% of the wage-increase over the lifecycle.

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The state of economics after the Lehman collapse

Review of
Basu, K., D. Rosenblatt, and C. Sepúlveda (eds.),2020. The State of Economics, the State of the World. Cambridge, MA, MIT Press. 552 pages. ISBN: 978-0-262-03999-4.
Forthcoming in The Journal of Regional Science

Review-State-of-economics

School-closure is counterproductive and self-defeating

Coen N. Teulings, Covid Economics, Issue 69, 18 February 2021, CEPR Press (pp 166-175)

Multigroup SIR model covid-19

Appendix to ‘School-closure is counterproductive and self-defeating’

Spatial and welfare effects of automated driving: Will cities grow, decline or both?

George Gelauff, Ioulia Ossokina, Coen Teulings

Transportation Research Part A: Policy and Practice, Volume 121, March 2019, Pages 277-294

Article

Land use, worker heterogeneity and welfare benefits of public goods

Teulings C.N. I.V. Ossokina, H.L.F. de Groot, Land use, worker heterogeneity and welfare benefits of public goods, Journal of Urban Economics (forthcoming), version October 15, 2017

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Wages, search frictions & sorting

Keynote speech Leed conference, Coimbra, July 14, 2017

Keynote speech

Endogenous growth and lack of recovery from the global crisis

de Ridder M., C.N. Teulings, endogenous growth and lack of recovery from the global crisis, VOX CEPR’s Policy Portal, July 13, 2017

Article

Article on Wall Street Journal

The urban economics of retail

Teulings C.N., I.V. Ossokina, J. Svitak, The Urban economics of retail, CPB Discussion Paper/352, June 1, 2017

Discussion paper

Secular stagnation, bubbles, fiscal policy, and the introduction of the pill

Lu J.Z., C.N. Teulings, Secular stagnation, bubbles, fiscal policy, and the introduction of the pill, CEPR Policy insight no. 86

Article

Are bubbles Bad?

Teulings C.N, Are Bubbles Bad? Is a higher debt target for the Euro-zone desirable? Paper for the CES Ifo Conference in Venice, March 2016

Paper

Can demography explain secular stagnation?

Gottfries A., C.N. Teulings (2015), Can demography explain secular stagnation?, VOX, January 30.
Article

Welfare Benefits of Agglomeration and Worker Heterogeneity

Teulings, C.N., I. Ossokina & H. de Groot, Welfare Benefits of Agglomeration and Worker Heterogeneity, Centraal Planbureau, Den Haag.

Publication

Unemployment and house price crises: Lessons for fiscal policy from the Dutch recession

Teulings C.N., Unemployment and house price crisis: Lessons for fiscal policy from the Dutch recession, IZA Journal of European Labor Studies.2014, 3:20

Article

Sorting and the output loss due to search frictions

Gautier P.A., C.N. Teulings, Sorting and the output loss due to search frictions, vol. 13(6), p. 1136-1166.
Article

Returns to tenure or seniority

Buhai, I.S., M.A. Portela, C.N. Teulings & A. van Vuuren (2013), Returns to tenure or seniority. Econometrica, 82(2), p. 705-730.

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Working paper version of this paper with the full theoretical model

Collective versus decentralized wage bargaining and the efficient allocation of resources

Cai, X., P.A. Gautier, C.N. Teulings & M. Watanabe (2014), Collective versus decentralized wage bargaining and the efficient allocation of resources, Labour, vol.26, p.34-42.