Cities and growth: Theory and evidence from France and Japan (original) (raw)
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This paper presents a theoretical approach to solve the main problems faced to explain the relationship between aggregate economic growth and the urban structure. The most significant conclusion reached is that there is a theoretical relationship between aggregate economic growth and urban concentration with an inverted-U shape. This result had been previously found in an empirical context (Henderson, 2003), but not as outcome of a theoretical model. An overlapping generations model with four different types of goods (some with both technological and local externalities) and two cities where their production could be located provides the dynamics of the movements of labor and goods across cities. The resulting system of two cities with different patterns of specialization, urban concentration and economic growth rates, makes clear how to set out the comparison of aggregate growth rates: only the aggregate growth rate between two steady states, one without migration but with trade sp...
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Growth of Metropolitan Regions: Three Ideas in Search of Evidence
unpublished paper (London School of …, 2008
Three principal theories of urban success are prominent among policy-makers today. The first holds that "global cities" are more successful than other cities, though they also have many problems that come from being globally-connected. A second theory asserts that having a higher "quality of life" is somehow a factor in urban economic success. And a third notion is that cities with more "creativity" perform better than cities that are less creative. Each of these notions has very serious problems when it comes to specifying their definitions and the indicators appropriate to them. More importantly, it is not clear that any of them explains regional economic growth and change. In this paper, we show that none of them has much success in explaining per capita income or overall growth rates of cities. The first two are almost entirely irrelevant, while the third, though corresponding better to per capita income, appears upon closer examination to offer little explanatory insight. Policy-makers should therefore beware of attempting to apply any of these theories. That they are so prevalent suggests in addition that scholarly research on comparative urban growth and development needs a major overhaul. JEL Classifications: O18, O33, J21, R11, R12, R23