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Urban Growth

  • Duncan Black
  • Vernon Henderson

This paper models and examines empirically the evolution of cities in an economy. Twentieth century evolution in the USA is characterized by parallel growth of cities of different types and on-going entry of new cities, together maintaining a stable relative size distribution of cities. Each type of city has a particular industrial composition and good(s) it specializes in and corresponding equilibrium size. This evolution is modeled in an economy with exogenous population growth and endogenous human capital accumulation. Within cities, there are knowledge spillovers as well as scale externalities. Individual city sizes grow with human capital accumulation; and cities grow in number if national population growth is high enough. Different types of cities grow in parallel in size and human capital accumulation. However, per capita income and human capital levels differ across city types by production process and benefits of human investments and spillovers, so there is observed inequality across cities among otherwise identical individuals.

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File URL: http://www.nber.org/papers/w6008.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6008.

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Date of creation: Apr 1997
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Publication status: published as "The Theory of Urban Growth," Journal of Political Economy, Vol. 107 (1999): 252-284.
Handle: RePEc:nbr:nberwo:6008
Note: EFG PE
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  1. Danny Quah, 1992. "Empirical Cross-Section Dynamics in Economic Growth," FMG Discussion Papers dp154, Financial Markets Group.
  2. Roland Benabou, 1993. "Heterogeneity, Stratification, and Growth," NBER Working Papers 4311, National Bureau of Economic Research, Inc.
  3. Roland Benabou, 1991. "Workings of a City: Location, Education, and Production," NBER Technical Working Papers 0113, National Bureau of Economic Research, Inc.
  4. Paul M Romer, 1999. "Endogenous Technological Change," Levine's Working Paper Archive 2135, David K. Levine.
  5. Dixit, Avinash K & Stiglitz, Joseph E, 1975. "Monopolistic Competition and Optimum Product Diversity," The Warwick Economics Research Paper Series (TWERPS) 64, University of Warwick, Department of Economics.
  6. Upton, Charles, 1981. "An equilibrium model of city size," Journal of Urban Economics, Elsevier, vol. 10(1), pages 15-36, July.
  7. Fujita, Masahisa & Ogawa, Hideaki, 1982. "Multiple equilibria and structural transition of non-monocentric urban configurations," Regional Science and Urban Economics, Elsevier, vol. 12(2), pages 161-196, May.
  8. 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.
  9. Henderson, J. Vernon, 1991. "Urban Development: Theory, Fact, and Illusion," OUP Catalogue, Oxford University Press, number 9780195069020, March.
  10. Henderson, J V, 1974. "The Sizes and Types of Cities," American Economic Review, American Economic Association, vol. 64(4), pages 640-56, September.
  11. Flatters, Frank & Henderson, Vernon & Mieszkowski, Peter, 1974. "Public goods, efficiency, and regional fiscal equalization," Journal of Public Economics, Elsevier, vol. 3(2), pages 99-112, May.
  12. Paul M Romer, 1999. "Increasing Returns and Long-Run Growth," Levine's Working Paper Archive 2232, David K. Levine.
  13. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
  14. Helsley, Robert W. & Strange, William C., 1990. "Matching and agglomeration economies in a system of cities," Regional Science and Urban Economics, Elsevier, vol. 20(2), pages 189-212, September.
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