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In the Rosen-Roback framework, we consider two cities. One of these (New York) has a productivity advantage (e.g. a port) and one (Santa Monica) has
In the Rosen-Roback framework, we consider two cities. One of these (New York) has a productivity advantage (e.g. a port) and one (Santa Monica) has an amenity advantage (e.g. nice beaches). What are the consequences? B. New York will have higher wages because of the productivity advantage, but Santa Monica will have higher rents because of the amenity advantage. C. New York will have higher wages due to both its own productivity advantage and Santa Monica's amenity advantage, but we can't say which will have higher rents
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