Over a millennium Europe has become largely urban. While urban growth, absolute and as a percentage of a growing population, has been as dramatic as economic change, many elements of continuity tie the present to the past. This evolution with path dependence is highlighted if one looks at European urban economies in terms of a dual systems model combining central place and network relationships. After the medieval push of town creation and differentiation, the early modern period saw a slowing of the increase in urban population and proportion, even as cities anchored the growth of overseas trade and of integrated territorial states. Growth was concentrated in major ports and capital or court cities. The role of cities in the rise of a market economy capable of sustained growth in output per head is tied to ongoing debates about how and why growth began in Europe, and within Europe in England. Industrialization led to enormous increases in urban agglomeration driven by transport improvements and increasing returns to scale in manufacturing as well as distribution. However, leadership functions tended to concentrate in giant capital cities rather than in the new industrial towns and conurbations. Within cities, rapid in-migration and lags in institutions and technology for urban management aggravated crowding and squalor. Conditions improved toward the turn of the 20th century, thanks in part to electricity and to more responsive and active government, as well as to slower urbanization. The depression and destruction of the 1914-1945 period was followed by great prosperity and enormous building. The information age appears to have conflicting impacts on agglomeration in Europe, with policy leaning toward sustaining dense cities (relative at least to the U.S.). The shift from older to newer industries, as well as growth in leisure and high human capital pursuits, has shifted activity away from many 19th century industrial centers and toward revitalized older cities and urbanized regions with higher amenity levels.
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ReDIF This chapter was published in: J. V. Henderson & J. F. Thisse (ed.) Handbook of Regional and Urban Economics, , chapter 67, pages 3021-3052, 2004.
Find related papers by JEL classification: R1 - Urban, Rural, and Regional Economics - - General Regional Economics
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