IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/6872.html
   My bibliography  Save this paper

Analyzing urban systems : have megacities become too large ?

Author

Listed:
  • Desmet, Klaus
  • Rossi-Hansberg, Esteban

Abstract

The trend toward ever greater urbanization continues unabated across the globe. According to the United Nations, by 2025 closes to 5 billion people will live in urban areas. Many cities, especially in the developing world, are set to explode in size. Over the next decade and a half, Lagos is expected to increase its population 50 percent, to nearly 16 million. Naturally, there is an active debate on whether restricting the growth of megacities is desirable and whether doing so can make residents of those cities and their countries better off. When analyzing whether megacities have become too large, policy makers often analyze a single city in depth. But no city is an island: improving urban infrastructure in one city might attract migrants, and a negative shock in one location can be mitigated because people can move to another. Considering the general equilibrium effects of any such urban policy is thus key. That is, when deciding whether to make medium-size cities more attractive, policy makers need to understand how cities of all sizes will be affected. The second section briefly summarizes the theoretical framework and discusses which data are needed. The third section implements the methodology for the benchmark case of the United States. The fourth section does the same for China and Mexico and compares the findings. And the last section concludes. A technical online appendix guides the reader through a practical, step-by-step, discussion of how to do the analysis.

Suggested Citation

  • Desmet, Klaus & Rossi-Hansberg, Esteban, 2014. "Analyzing urban systems : have megacities become too large ?," Policy Research Working Paper Series 6872, The World Bank.
  • Handle: RePEc:wbk:wbrwps:6872
    as

    Download full text from publisher

    File URL: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2014/05/20/000158349_20140520092717/Rendered/PDF/WPS6872.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Diego Restuccia & Richard Rogerson, 2008. "Policy Distortions and Aggregate Productivity with Heterogeneous Plants," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(4), pages 707-720, October.
    2. Timothy J. Kehoe & Kim J. Ruhl, 2010. "Why Have Economic Reforms in Mexico Not Generated Growth?," Journal of Economic Literature, American Economic Association, vol. 48(4), pages 1005-1027, December.
    3. Meza Felipe & Quintin Erwan, 2007. "Factor Utilization and the Real Impact of Financial Crises," The B.E. Journal of Macroeconomics, De Gruyter, vol. 7(1), pages 1-41, September.
    4. Steven J. Davis & John Haltiwanger, 1992. "Gross Job Creation, Gross Job Destruction, and Employment Reallocation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(3), pages 819-863.
    5. Lamia Kamal-Chaoui & Edward Leeman & Zhang Rufei, 2009. "Urban Trends and Policy in China," OECD Regional Development Working Papers 2009/1, OECD Publishing.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Steven Bond-Smith, 2022. "Diversifying Hawai‘i’s specialized economy: A spatial economic perspective," Working Papers 2022-5, University of Hawaii Economic Research Organization, University of Hawaii at Manoa.
    2. Jiadan Li & Jinsong Deng & Ke Wang & Jun Li & Tao Huang & Yi Lin & Haiyan Yu, 2014. "Spatiotemporal Patterns of Urbanization in a Developed Region of Eastern Coastal China," Sustainability, MDPI, vol. 6(7), pages 1-17, June.
    3. Quintero, Luis E. & Roberts, Mark, 2023. "Cities and productivity: Evidence from 16 Latin American and Caribbean countries," Journal of Urban Economics, Elsevier, vol. 136(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sangeeta Pratap & Carlos Urrutia, 2012. "Financial Frictions and Total Factor Productivity: Accounting for the Real Effects of Financial Crises," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 15(3), pages 336-358, July.
    2. Ezra Oberfield, 2013. "Productivity and Misallocation During a Crisis: Evidence from the Chilean Crisis of 1982," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(1), pages 100-119, January.
    3. Marcela Eslava & John Haltiwanger & Adriana Kugler & Maurice Kugler, 2010. "Factor Adjustments after Deregulation: Panel Evidence from Colombian Plants," The Review of Economics and Statistics, MIT Press, vol. 92(2), pages 378-391, May.
    4. Hansen, G.D. & Ohanian, L.E., 2016. "Neoclassical Models in Macroeconomics," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 2043-2130, Elsevier.
    5. Felipe Meza & Sangeeta Pratap & Carlos Urrutia, 2019. "Credit, Misallocation and Productivity: A Disaggregated Analysis," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 34, pages 61-86, October.
    6. Samaniego, Roberto M., 2006. "Industrial subsidies and technology adoption in general equilibrium," Journal of Economic Dynamics and Control, Elsevier, vol. 30(9-10), pages 1589-1614.
    7. Stephen J. Terry, 2023. "The Macro Impact of Short‐Termism," Econometrica, Econometric Society, vol. 91(5), pages 1881-1912, September.
    8. Eric Bartelsman & Paloma Lopez-Garcia & Giorgio Presidente, 2018. "Cyclical and Stuctural Variation in Resource Reallocation: Evidence for Europe," Tinbergen Institute Discussion Papers 18-057/VI, Tinbergen Institute.
    9. Seker, Murat, 2011. "Effects of licensing reform on firm innovation : evidence from India," Policy Research Working Paper Series 5876, The World Bank.
    10. Timothy J. Kehoe & Felipe Meza, 2011. "Catch-up growth followed by stagnation: Mexico, 1950–2010," Working Papers 693, Federal Reserve Bank of Minneapolis.
    11. Aubhik Khan & Julia K. Thomas, 2013. "Credit Shocks and Aggregate Fluctuations in an Economy with Production Heterogeneity," Journal of Political Economy, University of Chicago Press, vol. 121(6), pages 1055-1107.
    12. Philippe Aghion & Antonin Bergeaud & John Van Reenen, 2023. "The Impact of Regulation on Innovation," American Economic Review, American Economic Association, vol. 113(11), pages 2894-2936, November.
    13. Edoardo M. Acabbi & Ettore Panetti & Alessandro Sforza, 2019. "The Financial Channels of Labor Rigidities: Evidence from Portugal," GEE Papers 0138, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Dec 2019.
    14. Sánchez-Vela, Claudia & Valero-Gil, Jorge N., 2011. "The Effect of Firm-Size Dependent Policies on the Economy: The Case of the Repecos Law in Mexico," IDB Publications (Working Papers) 4549, Inter-American Development Bank.
    15. Heron Rios, 2023. "Capital Misallocation and Economic Development in a Dynamic Open Economy," UB School of Economics Working Papers 2023/455, University of Barcelona School of Economics.
    16. Sangeeta Pratap & Carlos Urrutia & Felipe Meza, 2017. "Credit, Misallocation and Productivity Growth: A Disaggregated Analysis," 2017 Meeting Papers 538, Society for Economic Dynamics.
    17. Reyes Aterido & Mary Hallward-Driemeier & Carmen Pagés, 2011. "Big Constraints to Small Firms' Growth? Business Environment and Employment Growth across Firms," Economic Development and Cultural Change, University of Chicago Press, vol. 59(3), pages 609-647.
    18. J. David Brown & Gustavo A. Crespi & Leonardo Iacovone & Luca Marcolin, 2018. "Decomposing firm-level productivity growth and assessing its determinants: evidence from the Americas," The Journal of Technology Transfer, Springer, vol. 43(6), pages 1571-1606, December.
    19. Hugo A. Hopenhayn, 2011. "Firm Microstructure and Aggregate Productivity," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 43(s1), pages 111-145, August.
    20. Julia K. Thomas & Aubhik Khan, 2011. "Default Risk and Aggregate Fluctuations in an Economy with Production Heterogeneity," 2011 Meeting Papers 1333, Society for Economic Dynamics.

    More about this item

    Keywords

    City Development Strategies; Urban Slums Upgrading; Urban Services to the Poor; Regional Governance; Urban Governance and Management;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:6872. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.