The dynamics of city formation
By: J. Vernon Henderson, Anthony Venables.
Contributors: Venables, Anthony.; National Bureau of Economic Research.
Series: NBER working paper series -- working paper 13769; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 13769.
Publisher: National Bureau of Economic Research
Published: 2008
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "This paper examines city formation in a country whose urban population is growing steadily over time, with new cities required to accommodate this growth.  In contrast to most of the literature there is immobility of housing and urban infrastructure, and investment in these assets is taken on the basis of forward-looking behavior.  In the presence of these fixed assets cities form sequentially, without the population swings in existing cities that arise in current models, but with swings in house rents.  Equilibrium city size, absent government, may be larger or smaller than is efficient, depending on how urban externalities vary with population.  Efficient formation of cities with internalization of externalities involves local government intervention and borrowing to finance development.  The paper explores the institutions required for successful local government intervention"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 6/12/2008.

Includes bibliographical references.

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