Ghiglino, Christian and Nishimura, Kazuo and Venditti, Alain (2020) A theory of heterogeneous city growth. International Journal of Economic Theory, 16 (1). pp. 27-37. DOI https://doi.org/10.1111/ijet.12253
Ghiglino, Christian and Nishimura, Kazuo and Venditti, Alain (2020) A theory of heterogeneous city growth. International Journal of Economic Theory, 16 (1). pp. 27-37. DOI https://doi.org/10.1111/ijet.12253
Ghiglino, Christian and Nishimura, Kazuo and Venditti, Alain (2020) A theory of heterogeneous city growth. International Journal of Economic Theory, 16 (1). pp. 27-37. DOI https://doi.org/10.1111/ijet.12253
Abstract
We consider an economy with three cities producing different outputs. Two cities produce intermediate goods, a type 1 city producing an intermediate “agricultural” good with capital and labor only, and a type 2 city producing an intermediate “industrial” good with capital, labor, and human capital. A type 3 city produces the final good which is obtained from the two intermediate goods and labor. The asymmetric introduction of human capital allows us to prove that the three cities experience, at equilibrium, heterogeneous endogenous growth rates which are proportional to the growth rate of human capital. We show that the “industrial” type 2 city is characterized by the larger growth rate while the “agricultural” type 1 city experiences the lower growth rate, and thus the type 3 city is characterized by a growth rate which is a convex combination of the two former growth rates. This implies that the relative size in terms of output of the “agricultural” city decreases over time. This property allows us to recover the empirical fact that most non‐agricultural production occurs in growing metropolitan areas. But, simultaneously, as we prove that total labor employed in each city is proportional to the total population, the relative population size distribution of cities is constant over time, as shown in empirical studies.
Item Type: | Article |
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Uncontrolled Keywords: | city inequalities; endogenous growth; heterogeneous growth rates; human capital; urban dynamics |
Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Economics, Department of |
SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
Depositing User: | Unnamed user with email elements@essex.ac.uk |
Date Deposited: | 11 May 2020 12:12 |
Last Modified: | 30 Oct 2024 17:29 |
URI: | http://repository.essex.ac.uk/id/eprint/27506 |
Available files
Filename: WP 2020 - Nr 02.pdf