Urban growth and its aggregate implications

Diego Puga and Gilles Duranton

No 14215, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We develop an urban growth model where human capital spillovers foster entrepreneurship and learning in heterogenous cities. Incumbent residents limit city expansion through planning regulations so that commuting and housing costs do not outweigh productivity gains. The model builds on strong microfoundations, matches key regularities at the city and economy-wide levels, and generates novel predictions for which we provide evidence. It can be quantified relying on few parameters, provides a basis to estimate the main ones, and remains transparent regarding its mechanisms. We examine various counterfactuals to assess quantitatively the effect of cities on economic growth and aggregate income.

Keywords: Urban growth; Agglomeration economies; Urban costs; Planning regulations; City size distributions (search for similar items in EconPapers)
JEL-codes: C52 D24 R12 (search for similar items in EconPapers)
Date: 2019-12
New Economics Papers: this item is included in nep-gro and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (29)

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Related works:
Journal Article: Urban Growth and Its Aggregate Implications (2023)
Working Paper: Urban Growth and its Aggreate Implications (2020)
Working Paper: Urban Growth and its Aggregate Implications (2019)
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