showSidebars ==
showTitleBreadcrumbs == 1
node.field_disable_title_breadcrumbs.value ==

SMU SOE Seminar Series (September 15, 2025): A Capital Idea? The Welfare Effects of Relocating Indonesia’s Government to a New City

Please click here if you are unable to view this page.

 
{HtmlEncodeMultiline(EmailPreheader)}

TOPIC:

A CAPITAL IDEA? THE WELFARE EFFECTS OF RELOCATING INDONESIA’S GOVERNMENT TO A NEW CITY

ABSTRACT

This paper specifies a dynamic quantitative spatial model to predict the growth and welfare effects of capital city relocations. The model incorporates public sector employment, informality, misallocation wedges, and a fiscal transfer system into a dynamic economic geography framework with trade and migration frictions. We calibrate the model using detailed data from Indonesia and we conduct policy experiments studying the creation of Nusantara, the nation’s new capital in East Kalimantan. We find that despite increasing employment in the new capital, building Nusantara reduces national growth and welfare. It also does not help to alleviate the negative impacts of climate change.

Keywords: Capital Relocations; Regional Development; Climate Change; Local Taxes; Persistence.

JEL: O18, R13, R53, Q54.

Click here to view the CV.
Click here to view the paper.

PRESENTER

Alex Rothenberg
Syracuse University

RESEARCH FIELDS

Urban
Development Economics

DATE:

15 Sep 2025 (Mon)

TIME:

4:00pm - 5:30pm

VENUE:

Meeting Room 5.1, Level 5
School of Economics
Singapore Management University
90 Stamford Road
Singapore 178903

 
FacebookYouTubeTwitterTelegramLinkedinInstagram

© Copyright 2025 by Singapore Management University. All Rights Reserved.
Internal recipients of SMU, please visit https://smu.sg/emailrules, on how to filter away this EDM.
For all other recipients, please click here to unsubscribe.

© Copyright 2025 by Singapore Management University. All Rights Reserved.