Dynamic control of rural-urban migration
This study investigates the optimal urbanization control of an underdeveloped economy by specifying a simple dynamic rural-urban model in which the urban sector bears both an intertemporal positive externality and a simultaneous negative externality. The dynamic optimization problem is solved for the political intervention of the central government in an intersectoral population distribution with taxes and subsidies. Our analysis provides the following results: (i) a big-push policy that leads an economy to a higher-income steady state with urbanization is not necessarily desirable if the government cannot borrow money at a sufficiently low interest rate; (ii) in order to sustain an appropriate urbanization speed, urbanization control policy should have a switch: the urban sector should be subsidized in order to accelerate rural-urban migration in early stages of development, and taxed to decelerate and eventually cease the migration in later stages.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Henderson, J Vernon, 1985. "The Tiebout Model: Bring Back the Entrepreneurs," Journal of Political Economy, University of Chicago Press, vol. 93(2), pages 248-64, April.
- Bertinelli, Luisito & Black, Duncan, 2004.
"Urbanization and growth,"
Journal of Urban Economics,
Elsevier, vol. 56(1), pages 80-96, July.
- BERTINELLI, Luisito & BLACK, Duncan, . "Urbanization and growth," CORE Discussion Papers RP 1724, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- BERTINELLI, Luisito & BLACK, Duncan, 2002. "Urbanization and growth," CORE Discussion Papers 2002044, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Murata, Yasusada, 2002. "Rural-urban interdependence and industrialization," Journal of Development Economics, Elsevier, vol. 68(1), pages 1-34, June.
- Jonathan Eaton & Zvi Eckstein, 1994.
"Cities and Growth: Theory and Evidence from France and Japan,"
NBER Working Papers
4612, National Bureau of Economic Research, Inc.
- Eaton, Jonathan & Eckstein, Zvi, 1997. "Cities and growth: Theory and evidence from France and Japan," Regional Science and Urban Economics, Elsevier, vol. 27(4-5), pages 443-474, August.
- Jonathan Eaton & Zvi Eckstein, 1994. "Cities and Growth: Theory and Evidence from france and Japan," Boston University - Institute for Economic Development 36, Boston University, Institute for Economic Development.
- Iwaisako, Tatsuro, 2002. "Technology choice and patterns of growth in an overlapping generations model," Journal of Macroeconomics, Elsevier, vol. 24(2), pages 211-231, June.
- J.V. Henderson, 1972.
"The Sizes and Types of Cities,"
75, Queen's University, Department of Economics.
- Paul M Romer, 1999.
"Increasing Returns and Long-Run Growth,"
Levine's Working Paper Archive
2232, David K. Levine.
When requesting a correction, please mention this item's handle: RePEc:eee:juecon:v:66:y:2009:i:3:p:196-202. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.