Cuberes, David (2007): A Model of Sequential City Growth. Unpublished.
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There is strong evidence showing that in most countries cities develop sequentially, with the initially largest city being the first to grow. This paper presents a growth model of optimal city size that rationalizes this particular growth pattern. Increasing returns to scale is the force that favors agglomeration of resources in a city, and convex costs associated with the stock of installed capital represent the congestion force that limits city size. The key to generate sequential growth is the assumption of irreversible investment in physical capital. The presence of a positive external effect of aggregate city capital on individual firms makes the competitive equilibrium inefficient.
| Item Type: | MPRA Paper |
|---|---|
| Institution: | Clemson University |
| Language: | English |
| Keywords: | cities; Gibrat's law; increasing returns; congestion costs |
| Subjects: | R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R12 - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, and Changes |
| ID Code: | 2172 |
| Deposited By: | David Cuberes |
| Deposited On: | 09. Mar 2007 |
| Last Modified: | 07. Nov 2007 02:17 |
| References: | Cuberes, D. (2007), "A Model of Sequential City Growth", working paper |
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