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

This paper develops a dynamic model that explains the pattern of population and production allocation in an economy with an urban location and a rural one. Agglomeration economies make urban dwellers benefit from a larger population living in the c...

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Main Authors:	Biller, Dan, Andres, Luis, Cuberes, David
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank Group, Washington, DC 2014
Subjects:	AGGLOMERATION ECONOMIES BENCHMARK CAPITAL INVESTMENT CENTRALIZATION CITIES COMPETITIVE EQUILIBRIUM CONSTANT RETURNS TO SCALE CONSUMERS CRISES CULTURAL CHANGE DECENTRALIZATION DEVELOPING COUNTRIES DEVELOPMENT POLICY DIVISION OF LABOR DYNAMIC ANALYSIS ECONOMIC GEOGRAPHY ECONOMIC GROWTH ECONOMICS EQUILIBRIUM EXTERNALITIES EXTERNALITY FUNCTIONAL FORMS GDP GDP PER CAPITA GROWTH RATE HUMAN CAPITAL INCOME INCOME LEVELS INCREASING RETURNS INEFFICIENCY INNOVATION INTERNATIONAL TRADE LABOR FORCE LABOR MARKET LABOR MIGRATION LARGE POPULATION LOCATION DECISIONS MACROECONOMICS MARGINAL PRODUCTIVITY MARKET FAILURES MIGRATION MONOPOLISTIC COMPETITION NATURAL RESOURCE NUMBER OF WORKERS OPPORTUNITY COST OPTIMIZATION PACE OF URBANIZATION PERFECT COMPETITION POLICY DISCUSSIONS POLICY IMPLICATIONS POLICY MAKERS POLICY RESEARCH POLICY RESEARCH WORKING PAPER POLITICAL ECONOMY POPULATION GROWTH POPULATION SIZE PRODUCT DIFFERENTIATION PRODUCTION FUNCTION PRODUCTIVITY INCREASES PROGRESS PUBLIC GOOD RESIDENTIAL DEVELOPMENT RESPECT RURAL AREAS RURAL POPULATION SAFETY SEARCH COSTS STATIC THEORY SUSTAINABLE DEVELOPMENT TRANSPORT ECONOMICS UNEMPLOYMENT URBAN URBAN AGGLOMERATIONS URBAN AREA URBAN AREAS URBAN DEVELOPMENT URBAN DWELLERS URBAN ECONOMICS URBAN ECONOMIES URBAN ECONOMY URBAN GROWTH URBAN MIGRATION URBAN POPULATION URBANIZATION URBANIZATION PROCESS UTILITY FUNCTION UTILITY FUNCTIONS WAGES
Online Access:	http://documents.worldbank.org/curated/en/2014/10/20257624/ http://hdl.handle.net/10986/20357

id	okr-10986-20357
recordtype	oai_dc
spelling	okr-10986-203572021-04-23T14:03:55Z A Dynamic Spatial Model of Rural-Urban Transformation with Public Goods Biller, Dan Andres, Luis Cuberes, David AGGLOMERATION ECONOMIES BENCHMARK CAPITAL INVESTMENT CENTRALIZATION CITIES COMPETITIVE EQUILIBRIUM CONSTANT RETURNS TO SCALE CONSUMERS CRISES CULTURAL CHANGE DECENTRALIZATION DEVELOPING COUNTRIES DEVELOPMENT POLICY DIVISION OF LABOR DYNAMIC ANALYSIS ECONOMIC GEOGRAPHY ECONOMIC GROWTH ECONOMICS EQUILIBRIUM EXTERNALITIES EXTERNALITY FUNCTIONAL FORMS GDP GDP PER CAPITA GROWTH RATE HUMAN CAPITAL INCOME INCOME LEVELS INCREASING RETURNS INEFFICIENCY INNOVATION INTERNATIONAL TRADE LABOR FORCE LABOR MARKET LABOR MIGRATION LARGE POPULATION LOCATION DECISIONS MACROECONOMICS MARGINAL PRODUCTIVITY MARKET FAILURES MIGRATION MONOPOLISTIC COMPETITION NATURAL RESOURCE NUMBER OF WORKERS OPPORTUNITY COST OPTIMIZATION PACE OF URBANIZATION PERFECT COMPETITION POLICY DISCUSSIONS POLICY IMPLICATIONS POLICY MAKERS POLICY RESEARCH POLICY RESEARCH WORKING PAPER POLITICAL ECONOMY POPULATION GROWTH POPULATION SIZE PRODUCT DIFFERENTIATION PRODUCTION FUNCTION PRODUCTIVITY INCREASES PROGRESS PUBLIC GOOD RESIDENTIAL DEVELOPMENT RESPECT RURAL AREAS RURAL POPULATION SAFETY SEARCH COSTS STATIC THEORY SUSTAINABLE DEVELOPMENT TRANSPORT ECONOMICS UNEMPLOYMENT URBAN URBAN AGGLOMERATIONS URBAN AREA URBAN AREAS URBAN DEVELOPMENT URBAN DWELLERS URBAN ECONOMICS URBAN ECONOMIES URBAN ECONOMY URBAN GROWTH URBAN MIGRATION URBAN POPULATION URBANIZATION URBANIZATION PROCESS UTILITY FUNCTION UTILITY FUNCTIONS WAGES This paper develops a dynamic model that explains the pattern of population and production allocation in an economy with an urban location and a rural one. Agglomeration economies make urban dwellers benefit from a larger population living in the city and urban firms become more productive when they operate in locations with a larger labor force. However, congestion costs associated with a too large population size limit the process of urban-rural transformation. Firms in the urban location also benefit from a public good that enhances their productivity. The model predicts that in the competitive equilibrium the urban location is inefficiently small because households fail to internalize the agglomeration economies and the positive effect of public goods in urban production. 2014-10-06T19:33:42Z 2014-10-06T19:33:42Z 2014-10 http://documents.worldbank.org/curated/en/2014/10/20257624/ http://hdl.handle.net/10986/20357 English en_US Policy Research Working Paper;No. 7051 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Group, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	AGGLOMERATION ECONOMIES BENCHMARK CAPITAL INVESTMENT CENTRALIZATION CITIES COMPETITIVE EQUILIBRIUM CONSTANT RETURNS TO SCALE CONSUMERS CRISES CULTURAL CHANGE DECENTRALIZATION DEVELOPING COUNTRIES DEVELOPMENT POLICY DIVISION OF LABOR DYNAMIC ANALYSIS ECONOMIC GEOGRAPHY ECONOMIC GROWTH ECONOMICS EQUILIBRIUM EXTERNALITIES EXTERNALITY FUNCTIONAL FORMS GDP GDP PER CAPITA GROWTH RATE HUMAN CAPITAL INCOME INCOME LEVELS INCREASING RETURNS INEFFICIENCY INNOVATION INTERNATIONAL TRADE LABOR FORCE LABOR MARKET LABOR MIGRATION LARGE POPULATION LOCATION DECISIONS MACROECONOMICS MARGINAL PRODUCTIVITY MARKET FAILURES MIGRATION MONOPOLISTIC COMPETITION NATURAL RESOURCE NUMBER OF WORKERS OPPORTUNITY COST OPTIMIZATION PACE OF URBANIZATION PERFECT COMPETITION POLICY DISCUSSIONS POLICY IMPLICATIONS POLICY MAKERS POLICY RESEARCH POLICY RESEARCH WORKING PAPER POLITICAL ECONOMY POPULATION GROWTH POPULATION SIZE PRODUCT DIFFERENTIATION PRODUCTION FUNCTION PRODUCTIVITY INCREASES PROGRESS PUBLIC GOOD RESIDENTIAL DEVELOPMENT RESPECT RURAL AREAS RURAL POPULATION SAFETY SEARCH COSTS STATIC THEORY SUSTAINABLE DEVELOPMENT TRANSPORT ECONOMICS UNEMPLOYMENT URBAN URBAN AGGLOMERATIONS URBAN AREA URBAN AREAS URBAN DEVELOPMENT URBAN DWELLERS URBAN ECONOMICS URBAN ECONOMIES URBAN ECONOMY URBAN GROWTH URBAN MIGRATION URBAN POPULATION URBANIZATION URBANIZATION PROCESS UTILITY FUNCTION UTILITY FUNCTIONS WAGES
spellingShingle	AGGLOMERATION ECONOMIES BENCHMARK CAPITAL INVESTMENT CENTRALIZATION CITIES COMPETITIVE EQUILIBRIUM CONSTANT RETURNS TO SCALE CONSUMERS CRISES CULTURAL CHANGE DECENTRALIZATION DEVELOPING COUNTRIES DEVELOPMENT POLICY DIVISION OF LABOR DYNAMIC ANALYSIS ECONOMIC GEOGRAPHY ECONOMIC GROWTH ECONOMICS EQUILIBRIUM EXTERNALITIES EXTERNALITY FUNCTIONAL FORMS GDP GDP PER CAPITA GROWTH RATE HUMAN CAPITAL INCOME INCOME LEVELS INCREASING RETURNS INEFFICIENCY INNOVATION INTERNATIONAL TRADE LABOR FORCE LABOR MARKET LABOR MIGRATION LARGE POPULATION LOCATION DECISIONS MACROECONOMICS MARGINAL PRODUCTIVITY MARKET FAILURES MIGRATION MONOPOLISTIC COMPETITION NATURAL RESOURCE NUMBER OF WORKERS OPPORTUNITY COST OPTIMIZATION PACE OF URBANIZATION PERFECT COMPETITION POLICY DISCUSSIONS POLICY IMPLICATIONS POLICY MAKERS POLICY RESEARCH POLICY RESEARCH WORKING PAPER POLITICAL ECONOMY POPULATION GROWTH POPULATION SIZE PRODUCT DIFFERENTIATION PRODUCTION FUNCTION PRODUCTIVITY INCREASES PROGRESS PUBLIC GOOD RESIDENTIAL DEVELOPMENT RESPECT RURAL AREAS RURAL POPULATION SAFETY SEARCH COSTS STATIC THEORY SUSTAINABLE DEVELOPMENT TRANSPORT ECONOMICS UNEMPLOYMENT URBAN URBAN AGGLOMERATIONS URBAN AREA URBAN AREAS URBAN DEVELOPMENT URBAN DWELLERS URBAN ECONOMICS URBAN ECONOMIES URBAN ECONOMY URBAN GROWTH URBAN MIGRATION URBAN POPULATION URBANIZATION URBANIZATION PROCESS UTILITY FUNCTION UTILITY FUNCTIONS WAGES Biller, Dan Andres, Luis Cuberes, David A Dynamic Spatial Model of Rural-Urban Transformation with Public Goods
relation	Policy Research Working Paper;No. 7051
description	This paper develops a dynamic model that explains the pattern of population and production allocation in an economy with an urban location and a rural one. Agglomeration economies make urban dwellers benefit from a larger population living in the city and urban firms become more productive when they operate in locations with a larger labor force. However, congestion costs associated with a too large population size limit the process of urban-rural transformation. Firms in the urban location also benefit from a public good that enhances their productivity. The model predicts that in the competitive equilibrium the urban location is inefficiently small because households fail to internalize the agglomeration economies and the positive effect of public goods in urban production.
format	Publications & Research :: Policy Research Working Paper
author	Biller, Dan Andres, Luis Cuberes, David
author_facet	Biller, Dan Andres, Luis Cuberes, David
author_sort	Biller, Dan
title	A Dynamic Spatial Model of Rural-Urban Transformation with Public Goods
title_short	A Dynamic Spatial Model of Rural-Urban Transformation with Public Goods
title_full	A Dynamic Spatial Model of Rural-Urban Transformation with Public Goods
title_fullStr	A Dynamic Spatial Model of Rural-Urban Transformation with Public Goods
title_full_unstemmed	A Dynamic Spatial Model of Rural-Urban Transformation with Public Goods
title_sort	dynamic spatial model of rural-urban transformation with public goods
publisher	World Bank Group, Washington, DC
publishDate	2014
url	http://documents.worldbank.org/curated/en/2014/10/20257624/ http://hdl.handle.net/10986/20357
_version_	1764445158568361984

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

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