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Urbanisation and the Onset of Modern Economic Growth

Author

Listed:
  • Liam Brunt
  • Cecilia García-Peñalosa

Abstract

A large literature characterises urbanisation as resulting from productivity growth attracting rural workers to cities. Incorporating economic geography elements into a growth model, we suggest that causation runs the other way: when rural workers move to cities, the resulting urbanisation produces technological change and productivity growth. Urban density leads to knowledge exchange and innovation, thus creating a positive feedback loop between city size and productivity that initiates sustained economic growth. This model is consistent with the fact that urbanisation rates in western Europe, most notably England, reached unprecedented levels by the mid-eighteenth century, the eve of the Industrial Revolution.

Suggested Citation

  • Liam Brunt & Cecilia García-Peñalosa, 2022. "Urbanisation and the Onset of Modern Economic Growth," The Economic Journal, Royal Economic Society, vol. 132(642), pages 512-545.
    • Handle: RePEc:oup:econjl:v:132:y:2022:i:642:p:512-545.
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    File URL: http://hdl.handle.net/10.1093/ej/ueab050
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    Cited by:

    1. Haldar, Anasuya & Sethi, Narayan, 2022. "Effect of sectoral foreign aid allocation on growth and structural transformation in sub-Saharan Africa—Analysing the roles of institutional quality and human capital," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 1010-1026.
    2. Beuselinck, Christof & Karavitis, Panagiotis & Kazakis, Pantelis & Mouna, Niswatil, 2024. "E-government and corporate tax planning: International evidence," MPRA Paper 122742, University Library of Munich, Germany.
    3. Dongmei Guo & Shuning Kong & Xin Li & Yiming Liu & Weizeng Sun, 2025. "Urbanization and subjective well-being of native urban residents: evidence from the “new-type urbanization pilot policy” in China," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 74(1), pages 1-27, March.
    4. Xintong Zhang & Cuijie Lu & Yuncai Ning & Jingtao Wang, 2022. "Spatiotemporal Coupling Effect of Regional Economic Development and De-Carbonisation of Energy Use in China: Empirical Analysis Based on Panel and Spatial Durbin Models," Sustainability, MDPI, vol. 14(16), pages 1-22, August.
    5. Runchen Zhou & Yang Guo & Yuzhe Wu, 2023. "Exploration on the Innovation Model of County Urbanization Development with the Resource Constraints in China," Sustainability, MDPI, vol. 15(22), pages 1-22, November.
    6. Casey B. Mulligan, 2021. "Peltzman Revisited: Quantifying 21st Century Opportunity Costs of FDA Regulation," NBER Working Papers 29574, National Bureau of Economic Research, Inc.
    7. Zhixin Zeng & Xiaojun Wang, 2023. "Will World Cultural Heritage Sites Boost Economic Growth? Evidence from Chinese Cities," Sustainability, MDPI, vol. 15(10), pages 1-19, May.
    8. Yue Wang & Sihan Chen & Zhicheng Zhou & Shen Zhong, 2025. "Does the New-Type Urbanization Policy Help Reduce PM2.5 Pollution? Evidence from Chinese Counties," Sustainability, MDPI, vol. 17(17), pages 1-31, August.
    9. Veselov, Dmitry & Yarkin, Alexander, 2024. "Lobbying for Industrialization: Theory and Evidence," IZA Discussion Papers 17045, IZA Network @ LISER.

    More about this item

    JEL classification:

    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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