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City size distribution and growth

  • Kopp, Andreas
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    We discuss theoretical approaches to study the relationship between the size distribution of a nation's cities and macroeconomic growth. The discussion is based on the hypothesis of the New Growth Theory that inter-personal spillovers of education and skills determine the long-run growth of the economy. Growth theory treats such externalities as being uniformly effective over national territories and completely internal to nation-state. This suggests a link to urban economics which has a long tradition of considering human capital externalities as driving forces of the growth of urban centers, with productivity increases inducing immigration. From the perspective of the urbanization literature long-run macroeconomic growth is thus determined by the functioning of cities as a catalysts for human capital accumulation. Theoretical avenues to the relationship between the development of cities of different sizes and aggregate growth can be distinguished according to whether the spillovers occur between different production sectors or just within a single sector. Empirical studies of the interrelationship have proven to be inconclusive. In view of the results of the empirical research, the character of inter-personal human capital spillovers depends much on the technological maturity of city industries and calls for taking account of industry-specific innovation cycles. More attention has also to be devoted to the question of the generality or sector-specificity of human capital in peculiar industries.

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    File URL: http://econstor.eu/bitstream/10419/19454/1/97.pdf
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    Paper provided by Hamburg Institute of International Economics (HWWA) in its series HWWA Discussion Papers with number 97.

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    Date of creation: 2000
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    Handle: RePEc:zbw:hwwadp:26303
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    Web page: http://www.econstor.eu/handle/10419/20
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    1. James E. Rauch, 1991. "Productivity Gains From Geographic Concentration of human Capital: Evidence From the Cities," NBER Working Papers 3905, National Bureau of Economic Research, Inc.
    2. Magnus Blomstrom & Robert E. Lipsey & Mario Zejan, 1993. "Is Fixed Investment the Key to Economic Growth?," NBER Working Papers 4436, National Bureau of Economic Research, Inc.
    3. Eaton, Jonathan & Kortum, Samuel, 1997. "Engines of growth: Domestic and foreign sources of innovation," Japan and the World Economy, Elsevier, vol. 9(2), pages 235-259, May.
    4. N. Gregory Mankiw & David Romer & David N. Weil, 1990. "A Contribution to the Empirics of Economic Growth," NBER Working Papers 3541, National Bureau of Economic Research, Inc.
    5. Young, Alwyn, 1994. "Lessons from the East Asian NICS: A contrarian view," European Economic Review, Elsevier, vol. 38(3-4), pages 964-973, April.
    6. Aghion, Philippe & Garcia-Peñalosa, Cecilia & Caroli, Eve, 1998. "Inequality and economic growth," Economics Papers from University Paris Dauphine 123456789/10096, Paris Dauphine University.
    7. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    8. Duncan Black & Vernon Henderson, 1999. "A Theory of Urban Growth," Journal of Political Economy, University of Chicago Press, vol. 107(2), pages 252-284, April.
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