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Urbanization and growth

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  • BERTINELLI, Luisito
  • BLACK, Duncan

Abstract

In a simple urban economics framework, we aim at highlighting how the trade-off between optimal and equilibrium city size behaves when introducing dynamic human capital externalities beside the classical congestion externalities. Our purpose is to show that there are dynamic gains from oversized cities. To this end, we assume that productivity depends on human capital, which is solely accumulated in cities, such that urbanization is the engine of growth. In an empirical illustration, we highlight the link between urbanization and human capital accumulation, by focusing on cross-country panel data.

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Bibliographic Info

Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2002044.

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Date of creation: 00 Sep 2002
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Handle: RePEc:cor:louvco:2002044

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Related research

Keywords: urbanization; human capital accumulation; economic development;

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  1. Alberto F. Ades & Edward L. Glaeser, 1994. "Trade and Circuses: Explaining Urban Giants," NBER Working Papers 4715, National Bureau of Economic Research, Inc.
  2. Henderson, J V, 1974. "The Sizes and Types of Cities," American Economic Review, American Economic Association, vol. 64(4), pages 640-56, September.
  3. Williamson, Jeffrey G., 1988. "Migration and urbanization," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 11, pages 425-465 Elsevier.
  4. Paul M Romer, 1999. "Increasing Returns and Long-Run Growth," Levine's Working Paper Archive 2232, David K. Levine.
  5. Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1989. "Industrialization and the Big Push," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1003-26, October.
  6. Galor, O. & Tsiddon, D., 1996. "The Distribution of Human Capital and Economic Growth," Papers 18-96, Tel Aviv - the Sackler Institute of Economic Studies.
  7. Davis, James C. & Henderson, J. Vernon, 2003. "Evidence on the political economy of the urbanization process," Journal of Urban Economics, Elsevier, vol. 53(1), pages 98-125, January.
  8. Yap, Lorene Y. L., 1977. "The attraction of cities : A review of the migration literature," Journal of Development Economics, Elsevier, vol. 4(3), pages 239-264, September.
  9. Funkhouser, Edward, 1998. "Changes in the returns to education in Costa Rica," Journal of Development Economics, Elsevier, vol. 57(2), pages 289-317.
  10. Murata, Yasusada, 2002. "Rural-urban interdependence and industrialization," Journal of Development Economics, Elsevier, vol. 68(1), pages 1-34, June.
  11. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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