Posted by: Peter Coy on January 07, 2008
I recommend a fascinating piece of academic research whose title is the headline above. It’s by Edward Glaeser and Giacomo Ponzetto, both of Harvard. They argue that advances in communications and transportation technology over the past few decades had two contradictory effects on cities, one negative and one positive. On one hand, better communications hurt cities (which are marked by extreme density) by reducing the importance of proximity for shipping goods and exchanging ideas. On the other hand, better communications can make new ideas more valuable by allowing them to be spread and used around the world. That, in turn, would make the hatcheries of new ideas more valuable.
So, which effect predominates? It depends. Glaeser and Ponzetto argue that for goods-producing cities like Detroit (right) and Cleveland, the negative effects have dominated, but for idea-producing cities like New York (left), Boston, San Francisco, and Minneapolis, the positive effects have dominated.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.