Working Paper: CEPR ID: DP10150
Authors: Klaus Desmet; J Vernon Henderson
Abstract: This chapter describes how the spatial distribution of economic activity changes as economies develop and grow. We start with the relation between development and rural-urban migration. Moving beyond the coarse rural-urban distinction, we then focus on the continuum of locations in an economy and describe how the patterns of convergence and divergence change with development. As we discuss, these spatial dynamics often mask important differences across sectors. We then turn our attention to the right tail of the distribution, the urban sector. We analyze how the urban hierarchy has changed over time in developed countries and more recently in developing countries. The chapter reviews both the empirical evidence and the theoretical models that can account for what we observe in the data. When discussing the stylized facts on geography and development, we draw on empirical evidence from both the historical evolution of today's developed economies and comparisons between today's developed and developing economies.
Keywords: developed countries; developing countries; development; economic geography; growth; space; urban economics
JEL Codes: O1; O18; R1; R11; R12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| economic development (O29) | spatial distribution of population (R23) |
| economic development (O29) | urbanization (R11) |
| urbanization (R11) | industrialization (O14) |
| government policies (H59) | concentration of economic activities (R11) |
| higher agricultural productivity (Q11) | industrialization (O14) |
| industrialization (O14) | urbanization (R11) |