Resilience in a noisy urban system

Abstract

AbstractThe ability of cities to recuperate from disturbances and return to their evolutionary pathways depends, first and foremost, on the type of damage that the shock created. But in addition, it depends on how information is transmitted in the urban system and on how noise filters distort the information that reaches economic agents. So long as the transmission of information does not disturb the functioning of the urban economy, shocks do not prevent the return to the long‐run evolutionary paths. We study the migration decisions of agents, following information that they receive using an agent‐based model of endogenous growth in a closed urban system. These decisions affect the spread of innovative ideas, of innovations, and the birth rate of new firms. The aggregate reactions of agents to shocks can affect the resilience of the entire urban system and of individual cities, sometimes allowing a return to the same domain, and sometimes driving the system and parts of its constituents to another regime of behavior. We analyze the repercussion of shocks on the resilience of urban systems by considering how noise in the transmission of information affects the decisions of agents at various times and locations. The conclusions are that, while information noise is a burden that constantly and systematically hinders the economic potential of the system, financial shocks reshuffle resources causing a fundamental change in the urban system trajectories.