Urban concentration and rural growth: a two-sector analysis
Kubo, Y.
Journal of Regional Science 26(3): 579-593
1986
ISSN/ISBN: 0022-4146 PMID: 12268317 DOI: 10.1111/j.1467-9787.1986.tb01061.xDocument Number: 346617
The paper examines the mechanism and extent of urban concentration using a two-sector growth model. The cause of urbanization is sought in the existence of urban scale economies. Assuming that temporary production decisions are concerned with optimal labour inputs and that profit incomes are reinvested according to relative profitability, the model shows persistent tendency for urban concentration and the transition of the economy from unlimited to limited labour supply. A simple example suggests that urban concentration is more likely than rural expansion with urban contraction.