New Findings from Federal Reserve Board of Governors in Investment Provides New Insights (Economic Diversity and the Resilience of Cities): Investment

2025 DEC 17 (NewsRx) -- By a News Reporter-Staff News Editor at Economics Daily Report -- Current study results on Investment have been published. According to news reporting originating in Washington, District of Columbia, by NewsRx journalists, research stated, “We develop a framework to assess how economic shocks affect local labor markets and worker welfare, with a focus on city-level economic diversity. Using detailed worker flow data across cities, sectors, and occupations, we construct theory-consistent welfare measures.”

Financial support for this research came from European Research Council (ERC).

The news reporters obtained a quote from the research from the Federal Reserve Board of Governors, “Our approach combines a dynamic discrete choice model with a dual representation that captures both direct effects and the insurance value of local economic diversity. Applied to French labor markets, we find that diversification dampens the effect of negative shocks: both job-to-job moves and net inflows decline less in diverse cities than in concentrated ones.”

According to the news reporters, the research concluded: “Overall, we document sizable welfare insurance gains from local economic diversity.”

This research has been peer-reviewed.

For more information on this research see: Economic Diversity and the Resilience of Cities. Journal of International Economics, 2025;158. Journal of International Economics can be contacted at: Elsevier, Radarweg 29, 1043 Nx Amsterdam, Netherlands. (Elsevier - www.elsevier.com; Journal of International Economics - http://www.journals.elsevier.com/journal-of-international-economics/)

Our news correspondents report that additional information may be obtained by contacting Francois de Soyres, Federal Reserve Board of Governors, Washington, DC 20551, United States. Additional authors for this research include Simon Fuchs, Illenin O. Kondo and Helene Maghin.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1016/j.jinteco.2025.104184. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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