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On the Distribution of City Sizes

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  • Cordoba, Juan Carlos

Abstract

The city size distribution of many countries is remarkably well approximated by a Pareto distribution. We study what constraints this regularity imposes on standard urban models. We find that under general conditions urban models must have (i) a balanced growth path and (ii) a Pareto distribution for the underlying source of randomness. In particular, one of the following combinations can induce a Pareto distribution of city sizes: (i) preferences for different goods follow reflected random walks, and the elasticity of substitution between goods is 1; or (ii) total factor productivities in the production of different goods follow reflected random walks, and increasing returns are equal across goods.
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Suggested Citation

  • Cordoba, Juan Carlos, 2010. "On the Distribution of City Sizes," Staff General Research Papers Archive 32121, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genres:32121
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    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General

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