Post-2008 articles on Jane Jacob’s ideas in economics

2010 book celebrating Jane Jacobs includes articles on economics (and systems thinking), some also available in alternative online form.  Preceded by a 1977 article:

David M. Nowlan, “Jane Jacobs Among the Economists”,  Ideas That Matter: The Worlds of Jane Jacobs, The Ginger Press, 1997, pp. 111-113, manuscript at

It is possible to be quite precise about the first significant notice of Jane’s work within the economics literature. It occurred in 1988, in an important paper by a well known University of Chicago economist, Robert Lucas. [….]

In the Lucas model human capital has two features of special importance. The first is that, with effort, it can be acquired without limit and it doesn’t take more effort to acquire it when you have more of it. The second is that higher average levels of human capital in an economy raise the level of productivity of everybody in that economy, not just the productivity of those whose human-capital level is higher.

The first feature allows economies to grow without slowing as they become richer, a possibility that the neoclassical model denied. The second feature introduces what’s called an “externality” into the model, and it is in this regard that Lucas found Jane Jacobs’ books to be particularly stimulating.

Ideas That Matter:  The World of Jane Jacobs

Susan Witt, “The Grace of Import Replacement”, What We See: Advancing the Observations of Jane Jacobs, New Village Press 2010 also available at

… the wealth of one region would not depend on exploiting the natural and human wealth of other regions.

Jacobs believed that the best way to achieve such sustainable economies is to examine what is now imported into a region and develop the conditions to produce those goods from local resources with local labor. She referred to this process as “import replacing.”

By contrast, the typical economic development model is for a city to use tax credits and other incentives to lure the branch of a multi-national corporation into its environs. Yet without deep roots in the local economy and local community, the same corporation might suddenly leave the area, driven by moody fluctuations in the global economy, and abandon workers and families.

What We See: Advancing the Observations of Jane Jacobs

Pierre Desrochers and Samuli Leppälä, 2010. “Rethinking ‘Jacobs Spillovers,’ or How Diverse Cities Actually Make Individuals more Creative and Economically Successful.” In Stephen A. Goldsmith and Lynne Elizabeth (eds), What We See. Advancing the Observations of Jane Jacobs, New Village Press, pp. 287-296, index at

… is associated with …

Pierre Desrochers and Samuli Leppälä. “Opening up the ‘Jacobs Spillovers’ black box: local diversity, creativity and the processes underlying new combinations.” Journal of Economic Geography 11, no. 5 (2011): 843-863.  DOI:10.1093/jeg/lbq028

… which both point to research into a comparison of the MAR (Marshall – Arrow – Romer) model vs. the Jacobs model…

Catherine Beaudry and Andrea Schiffauerova. “Who’s right, Marshall or Jacobs? The localization versus urbanization debate.” Research Policy 38, no. 2 (2009): 318-337, searchable at .

The reviewed empirical work has provided substantial academic support for the positive impact of both MAR (specialization) and Jacobs (diversity) externalities on regional performance. In addition, a non-negligible number of negative MAR effects imply that specialization of a region may also hinder economic growth. Diversification in contrast is much less likely to produce this negative impact. We have investigated whether the fact that the results of these studies are often conflicting could be explained by differences in the strength of agglomeration forces across industries, countries or time periods, but also by methodological issues and the various indicators of MAR and Jacobs externalities used in the research. Our analysis of the evidence presented in the paper strongly hints at measurement (level of aggregation of both industrial and geographical classifications) and to some extent at methodological (MAR and Jacobs indicators) issues as the main causes for the divergence observed in the literature and to the fact that the debate regarding MAR or Jacobs externalities remains unresolved.

(Borrowed the book from the Toronto Public Library!)

#economics, #externalities, #import-replacement, #jane-jacobs, #nature-of-economies