The dynamics of urbanisation

This paper considers the urbanisation dynamics induced by the migration decision of workers and the locational choice of the monopolistically competitive vertically linked firms. With high interregional transport costs, manufacturing and agriculture takes place in the two regions. With lower transport costs there are multiple equilibria, some involving a unique manufacturing metropolis. In a time of regional integration, the level of urban development of European countries is preserving its balanced system of cities. The emerging urban sector of less developed countries is lead instead into disporportionate metropolitan growth, converging in relative size but diverging in pattern to that of European countries.