New York and London are the Western world’s battling urban colossi, locked in a friendly competition for global supremacy that has persisted for 150 years. For most of the decades since 1914’s Guns of August pounded British finances, New York appeared to have the upper hand. Yet since the Great Recession London has surged while New York has been far more static. Why does the older city now appear to have the edge?

First of all let’s take a look at the record of both cities when it comes to jobs. Employment in London is rising, while New York employment is standing still. Between 2001 and 2012 the number of people in work in London rose by a robust 17 per cent while New York’s jobs figure rose by less than three per cent. Both cities have shown great resilience but London’s post-2007 expansion has been far more dramatic.

New York is still the more productive city. However, London’s per capita output levels dwarf those of the rest of the UK. London is also catching up quickly. At the start of the millennium per capita output was more than 20 per cent higher in New York than in London.

Since New York’s emergence as an urban giant in the early 19th century, there have been three phases in the two-city rivalry. In the years before the First World War New York could only gawk and marvel at the more sophisticated London, which sat supreme as the capital of global finance and a great empire.

From the Twenties to the Seventies, New York achieved its ascendancy. While London struggled through blitz and austerity years that were both brutal and heroic, New York romped from the roaring Twenties to the Mad Men era. While 19th-century authors such as Henry James fled from boorish New York to urbane London, New York became a lodestar for émigré artists from Piet Mondrian to Salman Rushdie. The United Nations even gave New York the opportunity to claim global political importance, although cynical New Yorkers were never really too enthusiastic about that by-product of Woodrow Wilson’s idealism.

But for 30 years the playing field has been levelled and London now seems to be surging ahead. Industrial de-urbanisation hurt both cities badly but London’s future never seemed as dark as New York’s did during its brush with bankruptcy in the Seventies. While Washington was perfectly willing to turn its back on a failing New York, no British Prime Minister would ever tell London to drop dead. London’s political role and its spectacular historic bones provide a kind of insurance against problems in financial services.

Moreover, the world has shifted in London’s direction. In 1950, New York was perfectly positioned between California and Western Europe. Nothing else mattered much economically. The rise of the Arab World in the Seventies, the emergence of Eastern Europe in the Nineties and India’s post-2000 successes have all improved London’s geography relative to New York.

New York has always benefited from its ability to attract the most ambitious Americans, from John D Rockefeller to Andy Warhol. London can now draw on an even larger labour pool, from Bangalore to Berlin.

Moreover, there are a number of social problems that continue to bedevil New York more seriously than London. New York is a safe city by US standards, and a vastly safer city than it was from the Seventies to the early Nineties, but the homicide rate in New York is still four times higher than in London. The bitter conflicts today between Mayor De Blasio and the police force have left many New Yorkers with the sense that their city’s safety is hardly so safe.

Cities rise and fall, based on their skills. Human capital is the great determinant of urban success and both London and New York continue to attract the skilled. But London’s schools are good, generally outperforming the UK as a whole. Despite decades of well-meaning reform, New York’s schools continue to struggle just like many large American cities.

London has been a pioneer in congestion pricing — a policy that New York badly needs. London can get support from a friendly Parliament for transport projects such as Crossrail and Tube upgrades and for the spectacular London Olympics. New York has been working on the underfunded Second Avenue Subway for my entire life.

New York seems particularly challenged right now because its Mayor is trying to use the tools of local government to fight inequality, which is a global phenomenon. When cities try to tax businesses and the rich, those taxpayers just move across the river to a lower-cost locale. Moreover, there is nothing fair about asking those people who choose to live in cities to disproportionately bear the burden of caring for the poor.

The one area in which New York still has the edge is construction. Both cities suffer from high real estate prices — the natural by-product of success. The only sensible way to promote affordability is to allow more construction. London has made great strides towards developing densely — skyscrapers now glitter around the Thames — but New York is still the better builder. London is right to revere its historic structures but it needs to allow enough more new space. Every time a local council says no to a new project, they are saying no to families who would love to be in London — and ensuring that the families that do live in London have to pay too much for their housing.

I love both New York and London, and am confident that both cities will continue to do more than their share for humanity. Yet it is hard for a native New Yorker such as myself not to be a little bit envious of the energy that is now on display in London.

Edward Glaeser is Glimp Professor of Economics at Harvard University and author of The Triumph of the City. He is speaking at tonight’s launch of Policy Exchange’s Capital City Foundation, supported by the Evening Standard.