A Dynamic Spatial Model of Rural-Urban Transformation with Public Goods

Biller, Dan ; Andres, Luis ; Cuberes, David

World Bank Group, Washington, DC

关键词: AGGLOMERATION ECONOMIES;    BENCHMARK;    CAPITAL INVESTMENT;    CENTRALIZATION;    CITIES;   

DOI  :  10.1596/1813-9450-7051
RP-ID  :  WPS7051

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This paper develops a dynamic model thatexplains the pattern of population and production allocationin an economy with an urban location and a rural one.Agglomeration economies make urban dwellers benefit from alarger population living in the city and urban firms becomemore productive when they operate in locations with a largerlabor force. However, congestion costs associated with a toolarge population size limit the process of urban-ruraltransformation. Firms in the urban location also benefitfrom a public good that enhances their productivity. Themodel predicts that in the competitive equilibrium the urbanlocation is inefficiently small because households fail tointernalize the agglomeration economies and the positiveeffect of public goods in urban production.