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This article measures the spatial heterogeneity of the costs of the economic crisis and assesses the role of cities as sources of regional resilience in Europe. Cities hosting financial activities have been severely hit during the crisis; however, they also host hard and soft territorial capital elements—high physical accessibility, access to information and knowledge, advanced functions, agglomeration economies—generating inter-sectoral productivity growth and the ability to adjust to the crisis. A scenario approach is used to capture the long term costs of the crisis, applying a new version of a macroeconometric regional growth forecasting model (MASST), recently updated to take account of the crisis. Results show that cities play a role in the resilience of regions; the quality of production factors hosted, the density of external linkages and cooperation networks and the quality of urban infrastructure give greater economic resilience to cities, and to the regions hosting them.

Spatial heterogeneity in the costs of the economic crisis in Europe: are cities sources of regional resilience?