Anthony Swaminathan
I am a PhD candidate in Economics at Duke University. My primary research interest is macroeconomics, with secondary interests in labor, behavioral, and spatial economics.
I will be on the 2026-2027 job market.
My job market paper is “Agglomeration, Sectoral Risk, and the Optimal Local Industry Composition.” [JMP]
Abstract
What is the optimal local industry composition when specialization increases expected productivity but also concentrates exposure to sectoral shocks? I study this question using a dynamic model that treats local industry composition as a portfolio with endogenous returns. Agglomeration externalities generate increasing returns to scale, stochastic industry productivity generates risk, and captive local demand determines how shocks pass through the local economy. These features generate a mean-variance trade-off: optimal ex ante specialization depends on both the expected gains from agglomeration and the costs of concentrated sectoral risk. I estimate the model with U.S. metro-industry data and use neural networks to solve the planner’s problem and decentralized equilibrium for the full set of U.S. MSAs and two-digit NAICS industries. The resulting optimal allocations show that risk reduces the optimal level of ex ante absolute and relative specialization compared to a no-shock benchmark, even in the absence of risk aversion per se. Moreover, the welfare gains from optimal policy are significantly smaller in the stochastic model than in the no-shock benchmark. These results imply that standard models of agglomeration that omit sectoral risk may overstate the optimal levels of absolute and relative specialization as well as the welfare gains from optimal policy.You can also access my CV here.
Contact information
Department of Economics
Duke University
213 Social Sciences, Room 230
Durham, NC 27708
Email: anthony.swaminathan@duke.edu
Phone: (530) 601-8485