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Gibrat's Law for (All) Cities

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Author Info
Jan Eeckhout
Abstract

Two empirical regularities concerning the size distribution of cities have repeatedly been established: Zipf's law holds (the upper tail is Pareto), and city growth is proportionate. Census 2000 data are used covering the entire size distribution, not just the upper tail. The nontruncated distribution is shown to be lognormal, rather than Pareto. This provides a simple justification for the coexistence of proportionate growth and the resulting lognormal distribution. An equilibrium theory of local externalities that can explain the empirical size distribution of cities is proposed. The driving force is a random productivity process of local economies and the perfect mobility of workers.

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Publisher Info
Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 94 (2004)
Issue (Month): 5 (December)
Pages: 1429-1451
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Handle: RePEc:aea:aecrev:v:94:y:2004:i:5:p:1429-1451

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Eaton, Jonathan & Eckstein, Zvi, 1997. "Cities and growth: Theory and evidence from France and Japan," Regional Science and Urban Economics, Elsevier, vol. 27(4-5), pages 443-474, August. [Downloadable!] (restricted)
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  2. Donald R. Davis & David E. Weinstein, 2002. "Bones, bombs and break points: The geography of economic activity," Discussion Papers 0102-02, Columbia University, Department of Economics. [Downloadable!]
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  3. Guy Dumais & Glenn Ellison & Edward L. Glaeser, 2002. "Geographic Concentration As A Dynamic Process," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 193-204, May. [Downloadable!] (restricted)
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  4. Edward L. Glaeser & Jose A. Scheinkman & Andrei Shleifer, 1995. "Economic Growth in a Cross-Section of Cities," NBER Working Papers 5013, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  5. Jan Eeckhout & Boyan Jovanovic, 2002. "Knowledge Spillovers and Inequality," American Economic Review, American Economic Association, vol. 92(5), pages 1290-1307, December. [Downloadable!] (restricted)
  6. Glaeser, Edward L, 1998. "Are Cities Dying?," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 139-60, Spring. [Downloadable!] (restricted)
  7. Gilles Duranton, 2002. "City Size Distributions As A Consequence of the Growth Process," CEP Discussion Papers 0550, Centre for Economic Performance, LSE. [Downloadable!]
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  8. Glenn Ellison & Drew Fudenberg, 2003. "Knife-Edge or Plateau: When do Market Models Tip?," Levine's Bibliography 506439000000000098, UCLA Department of Economics. [Downloadable!]
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  9. Henderson, J V, 1974. "The Sizes and Types of Cities," American Economic Review, American Economic Association, vol. 64(4), pages 640-56, September. [Downloadable!] (restricted)
  10. Xavier Gabaix & Yannis M. Ioannides, 2003. "The Evolution of City Size Distributions," Discussion Papers Series, Department of Economics, Tufts University 0310, Department of Economics, Tufts University. [Downloadable!]
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  11. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-70, May. [Downloadable!] (restricted)
  12. Xavier Gabaix, 1999. "Zipf'S Law For Cities: An Explanation," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 739-767, August. [Downloadable!] (restricted)
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  1. Bowen, H. & Munandar, H. & Viaene, J.M., 2006. "Evidence and implications of zipf’s law for integrated economies," Vlerick Leuven Gent Management School Working Paper Series 2006-03, Vlerick Leuven Gent Management School. [Downloadable!]
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  2. Yannis Ioannides & Esteban Rossi-Hansberg, 2005. "Urban Growth," Discussion Papers Series, Department of Economics, Tufts University 0513, Department of Economics, Tufts University. [Downloadable!]
  3. Cuberes, David, 2007. "A Model of Sequential City Growth," MPRA Paper 2172, University Library of Munich, Germany. [Downloadable!]
  4. J. Vernon Henderson & Anthony Venables, 2008. "The Dynamics of City Formation," NBER Working Papers 13769, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Esteban Rossi-Hansberg & Mark L.J. Wright, 2005. "Urban Structure and Growth," NBER Working Papers 11262, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. Berliant, Marcus & Watanabe, Hiroki, 2008. "Explaining the size distribution of cities: x-treme economies," MPRA Paper 8410, University Library of Munich, Germany. [Downloadable!]
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  7. Jeroen Hinloopen & Charles van Marrewijk, 2006. "Comparative Advantage, the Rank-size Rule, and Zipf's Law," Tinbergen Institute Discussion Papers 06-100/1, Tinbergen Institute. [Downloadable!]
  8. Mark Partridge & Dan Rickman & Kamar Ali & M. Olfert, 2008. "Employment Growth in the American Urban Hierarchy: Long Live Distance," Contributions to Macroeconomics, Berkeley Electronic Press, vol. 8(1), pages 1627-1627. [Downloadable!] (restricted)
  9. Rose, Andrew K, 2005. "Cities and Countries," CEPR Discussion Papers 5235, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  10. Kevin A. Bryan & Brian D. Minton & Pierre-Daniel G. Sarte, 2007. "The evolution of city population density in the United States," Economic Quarterly, Federal Reserve Bank of Richmond, issue Fall, pages 341-360. [Downloadable!]
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