Diversity and specialisation in cities: why, where and when does it matter?

Why are some cities specialised and others diversified? What are the advantages and disadvantages of urban specialisation and diversity? To what extent does the structure of cities, and the activities of the firms and people in them, change over time? How does the sectoral composition of cities and influence their evolution? To answer these and related questions, we first distil some key stylised facts from the empirical literature on cities and the composition of their activities. We then turn ti a review of different theories looking ot such issues, and study the extent to which these theories contribute ti the understanding of the empirical regularities.