35.  Tarnishing the Golden and Empire States: Land-Use Restrictions
and the U.S. Economic Slowdown
by Kyle F. Herkenhoff, Lee E. Ohanian, Edward C. Prescott  -  #23790 (EFG)

Abstract:

This paper studies the impact of state-level land-use restrictions on
U.S. economic activity, focusing on how these restrictions have
depressed macroeconomic activity since 2000.  We use a variety of
state-level data sources, together with a general equilibrium spatial
model of the United States to systematically construct a panel
dataset of state-level land-use restrictions between 1950 and 2014. 
We show that these restrictions have generally tightened over time,
particularly in California and New York.  We use the model to analyze
how these restrictions affect economic activity and the allocation of
workers and capital across states.  Counterfactual experiments show
that deregulating existing urban land from 2014 regulation levels
back to 1980 levels would have increased US GDP and productivity
roughly to their current trend levels. California, New York, and the
Mid-Atlantic region expand the most in these counterfactuals, drawing
population out of the South and the Rustbelt.  General equilibrium
effects, particularly the reallocation of capital across states,
accounts for much of these gains.  

http://papers.nber.org/papers/w23790?utm_campaign=ntw&utm_medium=email&utm_source=ntw