1. Enrico Moretti's chapter titled "The Great Divergence" contrasts the economic growth trajectories of two cities: Seattle, WA and Albuquerque, NM. Here, Moretti points to a relatively random event, Bill Gates' and Paul Allen's 1979 decision to move Microsoft's headquarters from Albuquerque to Seattle, as being critical to understanding the di- vergence between the two cities' economic prospects. Draw a simple diagram based on the lecture material to explain how the relocation of Microsoft's headquarters may have spurred on this divergence. Hint: Moretti uses the term "multiple equilibria" when discussion this pattern. In class, I used the term "unstable" to describe this same pattern.

1. Enrico Moretti's chapter titled "The Great Divergence" contrasts the economic growth trajectories of two cities: Seattle, WA and Albuquerque, NM. Here, Moretti points to a relatively random event, Bill Gates' and Paul Allen's 1979 decision to move Microsoft's headquarters from Albuquerque to Seattle, as being critical to understanding the di- vergence between the two cities' economic prospects. Draw a simple diagram based on the lecture material to explain how the relocation of Microsoft's headquarters may have spurred on this divergence. Hint: Moretti uses the term "multiple equilibria" when discussion this pattern. In class, I used the term "unstable" to describe this same pattern.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter2: Thinking Like An Economist

Section: Chapter Questions

Problem 5PA

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