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The Growth of Cities

In: Handbook of Economic Growth

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  • Duranton, Gilles
  • Puga, Diego

Abstract

Why do cities grow in population, surface area, and income per person? Which cities grow faster and why? To these questions, the urban growth literature has offered a variety of answers. Within an integrated framework, this chapter reviews key theories with implications for urban growth. It then relates these theories to empirical evidence on the main drivers of city growth, drawn primarily from the United States and other developed countries. Consistent with the monocentric city model, fewer roads and restrictions on housing supply hinder urban growth. The fact that housing is durable also has important effects on the evolution of cities. In recent decades, cities with better amenities have grown faster. Agglomeration economies and human capital are also important drivers of city growth. Although more human capital, smaller firms, and a greater diversity in production foster urban growth, the exact channels through which those effects percolate are not clearly identified. Finally, shocks also determine the fate of cities. Structural changes affecting the broader economy have left a big footprint on the urban landscape. Small city-specific shocks also appear to matter, consistent with the recent wave of random growth models.

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  • Philippe Aghion & Steven Durlauf (ed.), 2013. "Handbook of Economic Growth," Handbook of Economic Growth, Elsevier, edition 1, volume 2, number 2, December.
    This item is provided by Elsevier in its series Handbook of Economic Growth with number 2-781.

    Handle: RePEc:eee:grochp:2-781

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    Keywords: Urban growth; Agglomeration economies; Land use; Transportation; Amenities;

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    1. Alexander S. Skorobogatov, 2014. "An Ongoing Reversal Of Fortune Among Russian Cities: City Age, Natural Resources, And Changing Spatial Income Distribution," HSE Working papers WP BRP 60/EC/2014, National Research University Higher School of Economics.
    2. Steven Brakman & Harry Garretsen & Charles van Marrewijk, 2014. "The Crisis and Regional Resilience in Europe: On the Importance of Urbanization and Specialization," CESifo Working Paper Series 4724, CESifo Group Munich.

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