AbstractThis paper models and examines empirically the evolution of cities in an economy. Twentieth century evolution in the USA is characterized by parallel growth of cities of different types and on-going entry of new cities, together maintaining a stable relative size distribution of cities. Each type of city has a particular industrial composition and good(s) it specializes in and corresponding equilibrium size. This evolution is modeled in an economy with exogenous population growth and endogenous human capital accumulation. Within cities, there are knowledge spillovers as well as scale externalities. Individual city sizes grow with human capital accumulation; and cities grow in number if national population growth is high enough. Different types of cities grow in parallel in size and human capital accumulation. However, per capita income and human capital levels differ across city types by production process and benefits of human investments and spillovers, so there is observed inequality across cities among otherwise identical individuals.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6008.
Date of creation: Apr 1997
Date of revision:
Publication status: published as "The Theory of Urban Growth," Journal of Political Economy, Vol. 107 (1999): 252-284.
Note: EFG PE
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Find related papers by JEL classification:
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
- R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
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