Urban Growth

58 Pages Posted: 11 Jun 2000  

Duncan Black

University of California, Irvine - Department of Economics

J. Vernon Henderson

London School of Economics & Political Science (LSE); National Bureau of Economic Research (NBER)

Date Written: April 1997

Abstract

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.

Suggested Citation

Black, Duncan and Henderson, J. Vernon, Urban Growth (April 1997). NBER Working Paper No. w6008. Available at SSRN: https://ssrn.com/abstract=226419

Duncan Black (Contact Author)

University of California, Irvine - Department of Economics ( email )

3151 Social Science Plaza
Irvine, CA 92697-5100
United States

J. Vernon Henderson

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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