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The Death and Life of Great British Cities

Author

Listed:
  • Heblich, Stephan
  • Nagy, Dávid Krisztián
  • Trew, Alex
  • Zylberberg, Yanos

Abstract

Does industrial concentration shape the life and death of cities? Using newly constructed data that identify and track English and Welsh cities from the early nineteenth century to the present, we estimate the causal effects of industrial concentration and city size on urban dynamics. We show that greater industrial concentration reduces long-run productivity, conditional on industry-specific trends, consistent with the presence of cross-industry (Jacobs) externalities. We embed these dynamic city-level externalities in a quantitative multi-sector spatial model to evaluate their aggregate and distributional implications. Shutting down Jacobs externalities would reduce today’s North-South productivity divide by over 40%. The model also reveals a dynamic trade-off in the design of spatial clusters: patient policymakers favor diversification, whereas those prioritizing short-run gains favor concentration.

Suggested Citation

  • Heblich, Stephan & Nagy, Dávid Krisztián & Trew, Alex & Zylberberg, Yanos, 2025. "The Death and Life of Great British Cities," CEPR Discussion Papers 20420, Centre for Economic Policy Research.
    • Handle: RePEc:cpr:ceprdp:20420
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    Cited by:

    1. Filippo Boeri & Olmo Silva, 2026. "Marshall at the times of Marshall," CEP Discussion Papers dp2174, Centre for Economic Performance, LSE.
    2. Keiti Kondi & Willem Sas & Vincent Vandenberghe, 2025. "Where There was Smoke, There is Water: Canals as Indicator of Urban Income Inequality," LIDAM Discussion Papers IRES 2025008, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    3. Lukas Boehnert, 2026. "The Regional Specialization Trade-off," CESifo Working Paper Series 12798, CESifo.

    More about this item

    JEL classification:

    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • N93 - Economic History - - Regional and Urban History - - - Europe: Pre-1913
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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