Buzz: Face-to-Face Contact and the Urban Economy

Abstract Face-to-face contact remains central to co-ordination of the economy, despite the remarkable reductions in transport costs and the astonishing rise in the complexity and variety of information - verbal, visual, and symbolic which can be communicated near instantly. Over the past quarter century, long-distance business travel has grown faster than output and trade (Hall, 1998). There must be powerful reasons for economic agents to congregate and see each other,given the relatively high pecuniary and opportunity cost of business travel. Forces of urbanization and localization remain strong. For example, the geographical density of employment in many sectors in the US has actually increased in recent years (Kim, 2002).