Urbanists, test your knowledge of urban economics. Familiar with the concept of agglomeration externality? Finance professor and Bloomberg View writer Noah Smith opines it's a major reason why American cities are not as productive as they should be.
Although transport planners consider traffic congestion economically harmful, economic productivity tends to increase with congestion and decline with increased road supply. This paradox can be explained by more nuanced analysis of accessibility.
People naturally want to be near each other, which some suggest is one explanation for the increasing urbanization and densification of the world. Edward L. Glaeser argues that the information-based economy will push that trend even further.