The Geography of Development within Countries

75 Pages Posted: 25 Sep 2014

See all articles by Klaus Desmet

Klaus Desmet

Southern Methodist University (SMU); Centre for Economic Policy Research (CEPR)

J. Vernon Henderson

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

Date Written: September 2014

Abstract

This chapter describes how the spatial distribution of economic activity changes as economies develop and grow. We start with the relation between development and rural-urban migration. Moving beyond the coarse rural-urban distinction, we then focus on the continuum of locations in an economy and describe how the patterns of convergence and divergence change with development. As we discuss, these spatial dynamics often mask important differences across sectors. We then turn our attention to the right tail of the distribution, the urban sector. We analyze how the urban hierarchy has changed over time in developed countries and more recently in developing countries. The chapter reviews both the empirical evidence and the theoretical models that can account for what we observe in the data. When discussing the stylized facts on geography and development, we draw on empirical evidence from both the historical evolution of today's developed economies and comparisons between today's developed and developing economies.

Keywords: developed countries, developing countries, development, economic geography, growth, space, urban economics

JEL Classification: O1, O18, R1, R11, R12

Suggested Citation

Desmet, Klaus and Henderson, J. Vernon, The Geography of Development within Countries (September 2014). CEPR Discussion Paper No. DP10150. Available at SSRN: https://ssrn.com/abstract=2501633

Klaus Desmet (Contact Author)

Southern Methodist University (SMU) ( email )

6212 Bishop Blvd.
Dallas, TX 75275
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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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