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A Model of Sequential City Growth

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  • Cuberes, David

Abstract

There is strong evidence showing that in most countries cities develop sequentially, with the initially largest cities being the first to grow. This paper presents a growth model of optimal city size that rationalizes this growth pattern. Increasing returns to scale is the force that favors agglomeration of resources in a city, and convex costs associated with the stock of installed capital represent the congestion force that limits city size. The key to generate sequential growth is the assumption of irreversible investment in physical capital. The presence of a positive external effect of aggregate city capital on individual firms makes the competitive equilibrium inefficient.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 8431.

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Date of creation: 16 Feb 2008
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Handle: RePEc:pra:mprapa:8431

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Keywords: City Growth; Increasing Returns; Congestion Costs;

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Citations

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Cited by:
  1. Rafael Gonzalez-Val & Luis Lanaspa, 2013. "Patterns in US Urban Growth (1790?2000)," ERSA conference papers ersa13p254, European Regional Science Association.
  2. Giesen, Kristian & Suedekum, Jens, 2012. "The Size Distribution Across All "Cities": A Unifying Approach," IZA Discussion Papers 6352, Institute for the Study of Labor (IZA).
  3. David Cuberes, 2010. "Sequential city growth: empirical evidence," Working Papers. Serie AD 2010-05, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  4. María Sánchez-Vidal & Rafael González-Val & Elisabet Viladecans-Marsal, 2013. "Sequential city growth in the US: Does age matter?," ERSA conference papers ersa13p35, European Regional Science Association.
  5. Giesen, Kristian & Suedekum, Jens, 2013. "City age and city size," DICE Discussion Papers 120, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).

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