Cantillon Effect, city vs. city edition.https://twitter.com/paulkrugman/status/1152254896097386500 …
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Central bank is central hub of a trust network of credit. Toronto financial offices are much closer to that hub than Buffalo mundane industries, which are much closer to the rim.
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I just did a riff on Cantillon Effects here:https://twitter.com/williamaeden/status/1152787885495640064?s=21 …
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Ultimately I think it’s much more likely we see *industry* level effects than we would see *geographical* effects of the kind of magnitude you’re describing.
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For these two cities industry is strongly correlated with geography.
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Also, trust in the financial industry is based heavily on face-to-face contact.
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So interestingly enough, unlike before the crisis, finance is no longer the hot, booming place to be. Banks got a lot more boring. Hedge funds are shrinking. Equity research is on its last breath. You’d expect a lot more exuberance if they benefitted so much from the Fed.
End of conversation
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